By Associated Press - Tuesday, March 22, 2011

MOSCOW | Only a year ago, Russia’s dominance as a global energy supplier was threatened by low gas prices and a reputation as an unreliable trade partner. But with the world now shaken by Japan’s natural disasters and uprisings across the Middle East, the country is back at the heart of the market — and cashing in.

Russia’s state-owned monopoly Gazprom rushed to sell extra gas to European nations when their supplies from Libya ran dry during the escalating violence there. It will also gain from selling energy to Japan, where an earthquake and tsunami have shut down 12 gigawatts of nuclear capacity.

Gazprom told the Associated Press on Tuesday it is willing to ship more gas to Japan and is now in talks with several power-generating companies such as Tokyo Electric to sell them liquefied natural gas.

Japan’s struggle to keep radiation from leaking at the Fukushima nuclear plant, meanwhile, has caused a deep rethinking in the role of nuclear energy, particularly in Europe.

The upshot of the recent weeks’ events, analysts say, is that fossil-fuel producers stand to gain, particularly Russia.

“There’s every reason to assume that these events are a game changer, both for Gazprom and Russia, because Russia is viewed as a much more reliable gas supplier, and the customers are more likely to want to lock in supplies,” said Chris Weafer, chief strategist at Moscow-based brokerage UralSib.

While its reputation has in the past been tarnished by sudden gas cutoffs owing to pricing disputes with Ukraine, Gazprom — the company that handles the Russian state’s gas trade — has always insisted it was reliable.

With unrest spreading across the Middle East and threatening major new sources of gas, like Algeria, that may no longer sound like an exaggeration.

Russia already provides two-fifths of Europe’s gas imports, a figure that could grow. Libya, by comparison, accounted for about 2 percent before its taps were turned off because of the conflict.

In Japan, where authorities are trying to avert a nuclear meltdown and find energy supplies to feed the electricity grid, Gazprom has taken the opportunity to try to gain a foothold in a market it has long been trying to crack.

Russian Prime Minister Vladimir Putin said last week that Russia could redirect Europe-bound liquefied natural gas, which can be transported by ship, to Japan while shipping more piped gas to Europe.

Moscow-based investment bank VTB Capital has estimated that events in Japan and Libya could add an extra 3 percent to 5 percent to Gazprom’s sales this year — based on the assumption that Russia will sell an extra 10 billion to 15 billion cubic meters of gas to Europe and Japan.

In March, its sales were up by 1.5 billion cubic meters, or about 10 percent, compared with a year earlier.

The resurgence in Russia’s and Gazprom’s fortunes has been evident in the stock market. Shares in Gazprom have risen 11 percent in the past month — compared with a mere 2 percent rise in the 30-stock MICEX index.

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