ANKARA
Europe is unlikely to impose long-term bans on Russian imported natural gas, credit rating agency Fitch Ratings said Friday.
The agency said in the event of a lengthy ban imposed by either Europe or Russia in a report released by the agency named “Living Without Russian Gas,” gas-intensive sectors like steel and chemicals will be most affected.
In 2013 Russia supplied 145 billion cubic meters of gas to Europe, which is nearly 30 percent of the gas it consumed.
The report added that most of the available LNG in the world is already mainly tied to long-term supply contracts. Fitch said that Europe's Russian gas demand equates to nearly half of the world's LNG production and underlined that importing gas in liquefied natural gas (LNG) form would yield limited volumes.
“In theory, Europe has plenty of unused LNG regasification capacity, which could help replace some Russian supplies,” the report said, adding that, “the majority of plants are located in Southern Europe and the UK, far away from the Central and Eastern European countries that are most reliant on Russian gas.”
According to the report, the region would suffer from gas shortages and high prices due to its limited ability to reduce demand, source alternative supplies and transport gas to the most affected countries.
A surge in gas prices after a ban would probably also have negative effects on electricity, coal and oil prices. Industry would face supply shortages, as household demand would be given priority.
The report predicted that a temporary disruption affecting only gas supplies via Ukraine is a more likely scenario for which Europe is better prepared due to its high reserves and the recent opening of a new pipeline from Russia to Germany.
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