Menendez Raises Concerns over Potential Russian Takeover of US Energy Infrastructure Linden, NJ facility among dozens of American petroleum terminals, pipelines, refineries that could be acquired by majority Russian-owned Rosneft
BigNews.Biz - Apr 13,2017 - Menendez Raises Concerns over Potential Russian Takeover of US Energy Infrastructure
Linden, NJ facility among dozens of American petroleum terminals, pipelines, refineries that could be acquired by majority Russian-owned Rosneft
NEWARK, N.J. – U.S. Senator Bob Menendez (D-N.J.), senior member of the Senate Foreign Relations Committee, expressed concerns over the threats posed to our national security, economy and energy independence by the potential acquisition of critical U.S. energy infrastructure—including a Trembley Point facility in Linden-- by majority Russian government-owned Rosneft. The senator also released a bipartisan letter he led to the head of the Committee on Foreign Investment in the United States (CFIUS), a panel comprised of cabinet-level officials charged with assessing such transactions for threats to national security.
“Russia has used cyberattacks to disrupt energy grids in Ukraine. Likewise, Putin has used the Russian oil and gas industry to manipulate energy prices in Eastern European economies. We cannot let that happen here in the United States,” Sen. Menendez said. “We cannot give Putin any opening to affect the flow of oil or toy with Americans’ prices at the pump. And we cannot play Russian roulette with America’s energy infrastructure. The risk to our national security and our economy is not one I’m willing to take.”
Rosneft, a majority Russian government-owned oil company run by Putin crony Igor Sechin, could acquire a significant ownership share in CITGO Petroleum Corporation’s Venezuelan parent company, Petroleos de Venezuela S.A. (PdVSA), if PdVSA defaults on a loan backed by Rosneft. Venezuela’s current economic crisis is undermining PdVSA’s financial stability, increasing the possibility of default.
CITGO operates a notable portion of the nation’s energy infrastructure with 48 petroleum product terminals in 20 states, including the one in Linden, three refineries in Texas, Louisiana and Illinois, three fully-owned Texas pipelines, and six partially-owned pipelines.
To shore up its financial footing, PdVSA put up 49.9% of its ownership share in CITGO as collateral for a loan it took last year from Rosneft. Rosneft has also potentially acquired other PdVSA bonds on the open market, raising the possibility that it could take a majority stake in CITGO should PdVSA default.
U.S. sanctions were imposed on both Rosneft and Sechin in retaliation to Russia’s 2014 invasion of Ukraine and its growing aggression towards the U.S. and its allies.
“Russia’s ongoing efforts to interfere in the affairs of countries around the world is not up for debate,” said Sen. Menendez. “That’s why we must be vigilant about any attempts by Russia to gain any foothold in our country by any means, including through efforts that could put Russia in control over any of America’s critical energy infrastructure. Such access would pose a real threat to U.S. national security and have a potentially devastating economic impact on American consumers.”
Jennifer Harris, a senior fellow and expert in global energy security at the Council on Foreign Relations in New York City.
“Given Russia’s interference in the U.S. election and ongoing meddling