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EU plans joint gas purchases but at odds over Russian oil embargo amid energy crisis

EU plans joint gas purchases but at odds over Russian oil embargo amid energy crisis

US President Joe Biden and European Council President Charles Michel shake hands during a summit of European Union leaders, amid Russia’s invasion of Ukraine, in Brussels, Belgium, on March 24, 2022. REUTERS/Evelyn Hochstein

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BRUSSELS (Reuters) – European Union leaders on Friday backed plans to jointly buy gas and won a pledge from the United States to supply them with more liquefied natural gas, both steps aimed at helping the bloc weather an energy crisis exacerbated by Russia’s invasion of the country. Ukraine.

“We are coming together to reduce Europe’s dependence on Russian energy,” US President Joe Biden told reporters in Brussels as he announced the LNG deal. “We should not support Putin’s brutal attack on Ukraine.”

But, as the second day of the EU summit kicked off, it was clear that the bloc’s leaders were still at odds over whether to ban Russian oil and gas imports, and over proposals by Spain and others to reduce energy prices for consumers.

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Regarding the LNG deal, analysts say there is no reserve gas available in the world, which means it’s unclear where that extra supply might come from.

The invasion by Europe’s largest gas supplier pushed already high energy prices to record levels and prompted the European Union to pledge to cut Russian gas use by two-thirds this year by increasing imports from other countries and promoting renewable energy.

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“The energy bill is insanely high… This law must come down and we can do that as European countries if we work together,” Belgian Prime Minister Alexandre de Croo told reporters.

“That means, buying gas together … and putting some kind of hand brake to put a price cap on when prices are too high.”

Slovenian Prime Minister Janez Jansa said all countries support joint gas purchases to tame prices.

“There is a solution,” he said upon his arrival at the summit. “It’s common European procurement, joint logistics, joint construction of gas storage capacity.”

The European Commission said on Wednesday it was ready to lead negotiations that pool demand and seek gas before next winter, following a similar model in which the bloc has purchased COVID-19 vaccines on behalf of member states. Read more

Russia supplies 40% of the EU’s gas needs and more than a quarter of its oil imports.

the ban?

This energy dependence on Russia means that the question of whether to impose a ban, as the United States has done, is tougher – and divisive – in Europe, and no decision was expected on Friday.

Those who rely heavily on this offer are reluctant to take a step that would have a major economic impact.

Polish Prime Minister Mateusz Morawiecki said Germany, Hungary and Austria were among the most conservative about imposing a ban on oil and gas imports from Russia.

Diplomats said a group that includes Germany and the Netherlands is expected to back down on proposals to curb prices.

The transatlantic partners said the United States will supply 15 billion cubic meters of liquefied natural gas to European Union markets this year under the new deal announced on Friday. Read more

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EU Commission President Ursula von der Leyen said this was a “big step” towards reducing the bloc’s energy dependence on Russia.

However, with US factories already producing LNG at full capacity, analysts said most of the additional gas destined for Europe should come from exports that would otherwise go to other parts of the world.

The long-term goal, von der Leyen and Biden said, is to secure, until at least 2030, about 50 billion cubic meters per year of additional US LNG. Read more

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(Reporting by John Irish, Sabine Siebold, Jan Stropchevsky, John Chalmers, Benoit van Overstreten; Writing by Ingrid Melander; Editing by John Chalmers

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