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Gazprom’s Threat to Canada

Reuters reports Gazprom warned Canada that Russia could easily find an alternative market for its liquefied natural gas (LNG) if the Canadian authorities try to hinder a deal over the Rabaska LNG project. Canadian Prime Minister Stephen Harper said last month commercial natural gas deals with Russia could be put at risk because of Russia’s military action in Georgia. Gazprom Deputy CEO Alexander Medvedev told the 2008 Reuters Russia Investment Summit on Monday those comments had surprised Gazprom. “If there is a nightmare scenario that for some reason this project will be out of reach of realization based on a Canadian political decision, then for us it will be easy to find an alternative destination for our LNG,” Medvedev said. Someone should let Gazprom’s executives know that the spot market for LNG is much more competitive than the hostages held by pipelines. With Canadian LNG, Gazprom wants to have its cake and eat it too. Go ahead and let them.