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Posts tagged “Russian gas”

By Jennifer Warren on Mar 25, 2014 with 5 responses

Will the West’s Energy Play Deter Russia?

Gazprom, the Russian energy crown jewel, has seen its valuation drop considerably in the last few months in tandem with the Russian-Ukrainian crisis. Investors are having mixed reactions about Russia’s investment environment, though some are still playing roulette. Sanctions against Russian-linked investments must be carefully watched as they have significant valuation outcomes. Russia is now excluded from the June G-8 meeting, which has been moved from its original venue of Sochi.

Interestingly, markets reacted Tuesday, March 25th, by raising the stock price of Gazprom and Lukoil. In fact, Lukoil spiked 6% before coming back down. Markets have settled into the current state of the Russia-West standoff. Screen Shot 2014-03-25 at 11.44.20 AMShorting Russia, so to speak, potentially shorts many other firms like British Petroleum (BP), Exxon (XOM), Chevron (CVX) and Shell (RDS.B) (RDS.A). Washington could extend sanctions in key industries, which includes Russian energy, if any further challenges are initiated by Russia.

Many in Washington are wishing they had unlocked U.S. natural gas exports earlier. But the issue is receiving center stage with testimony happening today about accelerating liquified natural gas (LNG) exports. As a way to strengthen energy positions, the North American energy trifecta of the U.S., Canada and Mexico need steadfast, well-conceived policies, keeping recent events in mind, but long-term goals front and center. U.S. exports of LNG will not start officially flowing until the end of 2015 through Cheniere’s Sabine Pass facility located on the Louisiana side of the Gulf of Mexico. Another new LNG facility was approved on March 24th in Oregon.

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