Ukraine Snubs Russia by Buying U.S. Coal

Keith Kohl

Written By Keith Kohl

Posted August 1, 2017

For years, we’ve watched the drama between Russia and Ukraine play out, sometimes in the most violent ways possible.

Russian soldiers have occupied the country and surrounded its borders since 2014, when Russia claimed and annexed Ukraine for its own. This drove a wedge between Russia and a number of countries, and even prompted economic sanctions from the U.S. and EU.

The war has taken more than 10,000 lives in just a few years, and has left lasting effects on Ukrainian society.

Though there was a ceasefire in place as of 2015, the region has remained fraught with military skirmishes, and perhaps even more devastating, a war over energy.

Coal ShipRussia holds a unique position in Europe: as the largest source of natural gas for the area, Russia has remained a major supplier of the fuel to many European countries via pipeline.

As one of the region’s largest sources of energy, natural gas has become essential to life all across Europe.

And boy does Russia know it…

The country has a history of inflating natural gas prices, sometimes doubling the cost for buyers, then simply turning off supply should its payment demands not be met.

Ever since the shale boom, however, European countries have had the chance to buy more affordable natural gas in the form of LNG from the U.S.

Export capacity from the U.S. is still ramping up — it takes specialized infrastructure to cool the gas into a liquid, then load it onto massive tankers for transportation across the ocean.

In the meantime, it looks like the country at the center of this conflict has found another solution.

Rather than vying for much-anticipated U.S. gas supply, Ukraine has recently placed an order for its first import of U.S. coal.

Now, for those who don’t know, we’ve been watching the fall of coal just as closely as we’ve been watching the skirmishes in Ukraine. But the two didn’t seem to have any connection… until now.

Ukraine needs more reliable energy. The U.S. needs customers for its faltering coal industry.

The deal, inked between American Xcoal Energy & Resources and Ukranian Centrenergo, includes the shipment of nearly 700,000 tonnes of coal between now and the end of the year.

The first delivery will be made in September, supplying the country with 85,000 tonnes of thermal coal.

To continue reading about Ukraine’s deal for U.S. coal, click here.

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