Russia threatens to retaliate against UK and its allies, putting natural gas supplies in danger

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Russia is facing growing isolation as Western allies band together in a rare show of unity against Moscow and the U.S. slaps more sanctions on Russia. But as the cold-war-like rhetoric ratchets up, and Russia threatens to retaliate, there’s concern the country could cut off natural gas supplies across Britain and Europe.

On Thursday, the United States, Britain, France and Germany issued a joint statement backing the claim by Britain that Russia was behind the poisoning of former Russian spy Sergei Skripal and his daughter in England, and that Russia has failed to explain how the deadly nerve agent got to Britain.

“We share the U.K. assessment that there is no plausible alternative explanation, and note that Russia´s failure to address the legitimate request by the U.K. government further underlines its responsibility,” the statement said. “This use of a military-grade nerve agent, of a type developed by Russia, constitutes the first offensive use of a nerve agent in Europe since the Second World War. It is an assault on U.K. sovereignty and any such use by a state party is a clear violation of the Chemical Weapons Convention and a breach of international law. It threatens the security of us all.”

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In comments to reporters in Washington, U.S. President Donald Trump left little doubt about Russia’s involvement. “It certainly looks like the Russians were behind it, something that should never ever happen. We are taking it very seriously as, I think, are many others,” Mr. Trump said.

Prime Minister Justin Trudeau also condemned the attack in a statement released Thursday that “Canada is unwavering in its commitment to the United Kingdom. The United Kingdom can count on Canada’s full support in efforts to hold Russia to account for this unacceptable and unlawful behaviour.”

The statements came a day after the British government expelled 23 Russian diplomats and promised a series of other measures in retaliation for what British Prime Minister Theresa May called Russia’s “unlawful use of force.” The U.S. Treasury Department also cited the Skripal poisoning on Thursday as it announced sanctions on 19 Russians for alleged interference in the 2016 U.S. election.

British investigators have said that Mr. Skripal and his daughter, Yulia, were exposed to a Russian nerve agent last week while on an outing in Salisbury, where Mr. Skripal lives. During the 1990s, he worked secretly for Britain’s MI6, revealing the identities of dozens of Russian spies. He was arrested in 2004 in Moscow and convicted of treason, but won release in 2010 as part of a spy swap between Russia, the U.S. and Britain.

Russia has denied any involvement in the poisoning and vowed to retaliate with expulsions of British diplomats. Dmitry Peskov, a spokesman for Russian President Vladimir Putin, said Thursday that he was “perplexed and does not comprehend the British leadership stance.” He added that the accusations were unsubstantiated.

As the diplomatic feud escalates, energy security has become the latest concern.

Western Europe gets about 35 per cent of its gas from Russia. Last year, deliveries reached a record level. Britain is less dependent on Russian gas, sourcing nearly half of its supply from the North Sea and importing another 44 per cent via pipelines from Norway and the rest of Europe. However, North Sea supplies are dwindling and Britain is buying more liquefied natural gas from Qatar and Russia. So far this year, half of the shipments to Britain have come from Russia’s new LNG plant in Yamal, which opened in December. Those LNG supplies became crucial for home heating during the latest storm, dubbed the “Beast from the East,” which saw the country’s gas supply run dangerously low. Energy giants like Royal Dutch Shell PLC, a British-Dutch company, and London-based BP PLC also have extensive joint ventures in Russia.

“There will likely be a certain amount of pressure applied to British companies that invest in Russia, as well as Russian companies that seek to invest in the U.K.,’’ said Justin Dargin, a global energy expert at the University of Oxford. “And, while the sanctions regime focuses upon technology transfer to the Russian energy sector, it does not apply against Russian gas itself. Moving forward, we will likely see British dependence growing on Russian LNG imports in the near to mid-term since Yamal came online.” He added that Britain could cope if Russia immediately cut off LNG supplies, since there is a global glut of gas, but that could change over time as Britain becomes more reliant on supplies.

This week, Ms. May said that as part of the new sanctions measures against Russia, Britain “was looking at our gas supplies, we are looking to other countries.” Several Members of Parliament have urged her to cut off Russian gas as has the labour union GMB, which represents workers in the energy sector. “We cannot and should not be beholden to foreign powers who could turn the tap off, having a huge impact on people, communities, businesses and the whole economy,” the union said.