U.S. talks with energy firms on contingency plans for Europe

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U.S. talks with energy firms on contingency plans for Europe

Flames from a gas burner on a cooker are seen in this illustration photo taken in a private home in Nice.

The U.S. government has held talks with several international energy companies on contingency plans to supply natural gas to Europe if Russia and Ukraine disrupts Russian supplies, two U.S. officials and two industry sources told Reuters on Friday.

Russia is prepared for the possibility of a new military assault on the country it invaded in 2014, according to the United States. Russia doesn't plan to attack Ukraine.

The European Union depends on Russia for about a third of its gas supplies, and U.S. sanctions could disrupt that supply.

Any interruption to Russia's gas supply to Europe would cause a crisis in the energy sector, which is now exacerbated by a shortage of fuel. Record power prices have caused consumer energy bills as well as business costs to go up and cause protests in some countries.

State Department officials approached the companies to ask where additional supplies might come from if they were needed, two industry sources familiar with the discussions told Reuters, speaking on condition of anonymity due to the sensitivity of the matter.

The companies told the U.S. government officials that global gas supplies are tight and there is little gas available to replace large volumes from Russia, the industry sources said.

A senior advisor for energy security Amos Hochstein, a senior U.S. State Department official said, while speaking on condition of anonymity, the State Department's discussions with energy companies were led by senior advisor for energy security Amos Hochstein. The State Department did not ask the companies to increase output, the official said.

The source said that we discussed a number of contingencies and we talked about all that we're doing with our nation's state partners and allies.

We've done this with the European Commission, but we've done it with energy companies. It's true that we've spoken to them about our concerns, and spoken to them about a range of contingencies, but there wasn't any sort of ask when it comes to production. The U.S. officials also asked whether companies had the capacity to increase exports and postpone field maintenance if necessary, as well as asking companies what capacity they had to raise supplies.

It was not clear which companies U.S. officials contacted. Exxon, ConocoPhillips and Royal Dutch Shell didn't want to say anything when asked if they had been contacted. Chevron Corp, Total, Equinor and Qatar Energy did not respond to a request for comment.

According to a second industry source, his company was asked whether it had the ability to postpone maintenance at gas fields if necessary.

A spokesman for the U.S. National Security Council would not comment on U.S. discussions with energy companies, but said contingency planning was underway.

The spokesperson said that it's good governance and standard practice to look at ways to reduce the spillovers and assess ways to reduce those spillovers.

Any details in this regard that make their way to the public show the extensive detail and seriousness with which we are discussing and are prepared to impose significant measures with our allies and partners. Moscow has alarmed the West by massing troops near Ukraine in the past two months, following its seizure of Ukraine's Crimea peninsula in 2014 and its backing of separatists fighting Kyiv troops in eastern Ukraine.

Biden has previously told Russian President Vladimir Putin that a new Russian move on Ukraine would result in sanctions and increased U.S. presence in Europe.

Russia denies it plans to attack Ukraine and says it has the right to move troops on its own soil as it likes.

The second industry source said that the United States promised to have Europe's back if there is an energy shortage due to conflict or sanctions.

Amos is going to big LNG producing companies and countries like Qatar to see if they can help the United States, he said.

European buyers would need to look for cargoes of superchilled gas if supplies from Russia to Europe are reduced.

U.S. exports of liquefied natural gas LNG are set to soar this year to make it the world's top LNG supplier. Europe is competing for LNG supplies from suppliers such as the United States and Qatar with top consumers China and Japan, which also face an energy crunch.