How Private Investors Can Participate in Europe's Alternatives to Russian Gas Supply

Russia’s invasion of Ukraine in February 2022 precipitated an unprecedented energy crisis in Europe. At the time of writing, year-on-year Russian deliveries have fallen by two thirds, with the threat of further supply cuts heading into winter. Europe must now replace (or eliminate demand for) 40% of its natural gas supply. To address the challenge, short-term responses have been activated and policy frameworks put in place, all of which indicate that the private sector is an important part of the solution.

The question posed by client Citi Global Wealth was how their clientele of wealthy individuals and family offices might support Europe's pivot away from Russian gas. The Capstone workshop's answer is to identify possible investment targets among the publicly listed companies leading Europe's transition. The report develops a framework to assist Citi Global Wealth’s clients to sort the universe of key players.

Based on a review of the solutions expected to contribute most to gas supply replacement and demand reduction, the report identified four areas most likely to contain investable players – LNG imports (Part 2), LNG exports (Part 3), wind and solar (Part 4) and space heating (Part 5). Other solutions were considered in Part 6. The report adopted a consistent analytic procedure assessing the key players on two measures – the scope of each company's operational focus on Europe, and its likelihood of being a suitable investment target for Citi’s clients (based on opportunities and risks, and filters on the appropriate investment universe). A likelihood-scope mapping was presented as a matrix at the end of each part.