Jones Act Forces New England to Import Gas From Russia - Global Trade Magazine
  January 24th, 2018 | Written by

Jones Act Forces New England to Import Gas From Russia

Sharelines

  • Gas from a project in Russia subject to US sanctions is headed for Boston.
  • Cargo on LNG tanker is presumed to contain gas that originated from Russia’s Yamal LNG plant.
  • New England buys domestic gas, but domestic supplies can’t satisfy 100-percent of the region’s demand.
  • US imposed sanctions on Russia’s Yamal LNG project in 2014.

The first imports into North America that include gas from a project in Russia subject to United States sanctions is headed to Boston on board the LNG tanker Gaselys, Bloomberg has reported.

The French energy company Engie bought the gas to meet demand during the recent freezing weather in the northeast US.

The cargo being carried in the tanker came from a storage tank in the United Kingdom and contained a mix of gas which originated in Algeria, Trinidad and Tobago, and Qatar. It is presumed also to contain gas that originated from Russia’s Yamal LNG plant.

The fact that the US is now the world’s biggest natural gas producer, raises the question: Why can’t New England buy domestic gas?

It does, but domestic supplies can’t satisfy 100-percent of the region’s demand, especially during the winter. A report from the US State Department notes that pipelines entering the state bring natural gas from the Gulf Coast, Midwest, and Pennsylvania. Massachusetts also has the only LNG import terminals in New England, one at Everett on Boston Harbor and two offshore from Gloucester and LNG, used primarily during the winter, provides around one-tenth of New England’s natural gas supply, and is imported from the Caribbean and the Middle East.

So why, again, not from US sources?

As the Bloomberg report explains, LNG can’t be shipped to New England from export terminals on the Gulf of Mexico thanks to the Jones Act. None of the world’s fleet of 500 LNG tankers meets the requirements of the Jones Act, that vessels moving between US ports be built in the US, flagged in the US, and crewed by US citizens.

An even bigger question: What about US sanctions on Russian energy? The US imposed sanctions on Russian energy projects, including Yamal, in 2014, in response to Russia’s role in the upheavals in Ukraine. Bloomberg reports that “Engie said the fuel is compliant with all US trade laws.”

And it probably is, because the sanctions prohibit US persons from participating in the financing of Russian gas projects  but not from buying Russian gas.

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