It's not quite "Tear down this wall," but the Russian bear can only play hardball with natural gas and its neighbors before the free market brings a response.
While ExxonMobil's announcement that it's buying Fort Worth's XTO Energy for $31 billion and $10 billion in debt is a rousing cheer for US shale producers, the real stimulus has been Russia's annual bully-thy-neighbor approach to winter gas supplies.
Exxon made no bones Monday it was buying XTO for its expertise in cracking shale gas plays, with plans to export that talent to the nearly 3 million acres of shale leasehold it has in Poland, Hungary, and Germany. CEO Rex Tillerson almost salivated at the prospect of producing gas smack in the middle of a gas-hungry market (same dynamics as Pennsylvania's Marcellus Shale and a little town called New York City).
Making that market roar, however, will be giving Eastern European consumers a stab at freedom from the nearly annual turn-ons and shut-offs of natural gas supplies from Russia via Ukraine.
Last month, Gazprom said US shale gas would have no effect on its plans to import Russian LNG to the states. ExxonMobil is about to find out if Hungarian-German-Polish gas will have an effect on Gazprom.
Source: Platts.com
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