Europe is getting more LNG from USA

European nations are far behind Mexico and China when it comes to receiving liquefied natural gas from USA, but the region is making its biggest effort to date to change that.
European Commission trade officials will travel to Washington to follow up on an energy agreement on July between the Commission’s President Jean-Claude Juncker and U.S. President Donald Trump. Europe pledged to import more LNG in a bid to diversify imports, while America is seeking new markets for its expanding LNG production. Russia is currently Europe’s biggest supplier.
“The European Union is ready to facilitate more imports of liquefied natural gas from the US and this is already the case as we speak,” Juncker said in a statement. “The growing exports of U.S. liquefied natural gas, if priced competitively, could play an increasing and strategic role in EU gas supply.”
Imports
Europe received about 10 percent of total U.S. exports last year, up from 5 percent in 2016 after the American shale gas revolution went global with the opening of the Sabine Pass export facility on the country’s Gulf of Mexico coast. Since then, Europe has imported more than 40 LNG cargoes from the U.S., or 2.8 billion cubic meters, the Commission said.
Still, that’s just a fraction of Europe’s demand of almost 550 billion cubic meters last year. Most gas arrives by pipelines from Russia and Norway, as well as in LNG tankers from Qatar, the biggest producer of the super-chilled fuel. As the region’s own fields deplete and nuclear and coal plants are decommissioned, demand for the fuel is rising.
Europe has also pledged to reduce its increasing dependency on the Russian fuel by supporting the development of new LNG terminals. So far, the economics work against large-scale U.S. LNG volumes sent to Europe, but that may change as the global market for the fuel expands. While sales to Europe has so far been modest, Citigroup Inc. said in May.
To facilitate LNG trade with the region, the U.S. needs to lift its requirement for prior regulatory approval of exports to the EU, the Commission said. The bloc has also committed to help finance LNG infrastructure projects and is supporting new terminals from Croatia to Greece and Ireland.
Trump: Europe to become a “massive buyer” of LNG
Europe will build more terminals to import U.S. liquefied natural gas, the head of the European Commission told U.S. President Donald Trump during a meeting aimed at averting a transatlantic trade war.
“They want very much to do that, and we have plenty of it,” Trump said, referring to the US shale boom, which has unleashed record supplies of the heating and power-plant fuel. “They will be a massive buyer, and they will be able to diversify their energy supply.”
The comments were part of a bigger agreement in which Trump and Jean-Claude Juncker, the European Commission president, said they would suspend new tariffs while negotiating over trade. The two leaders also pledged to expand imports of soybeans and to lower industrial tariffs, excluding autos.
LNG imports to Europe are poised to rise almost 20 percent by 2040 from 2016 levels, according to International Energy Agency. While Russia has long been the region’s top supplier, it’s now facing significant challenges from both the US and Qatar, rivals with vast natural gas reserves.
Trump and Juncker spoke to the media after meeting at the White House. The comments quickly sparked investor reaction for both Cheniere Energy Inc., America’s largest exporter of LNG, and Tellurian Inc., which is working to get its export project in Louisiana approved.
Europe is looking to step up gas imports with its largest production field in the Netherlands slated to shut and France moves toward shutting nuclear power plants.
“There are plenty of supply options here to be able to meet increased European demand,” said Jason Feer, global head of business intelligence at Poten & Partners Inc.
European demand is rising
After Cheniere began shipping gas two years ago from its Sabine Pass terminal in Louisiana -the first to send shale output abroad- the U.S. became a net exporter of the fuel for the first time since the 1950s. This year, Dominion Energy Inc. opened the first export facility on the East Coast, providing a quicker route to European buyers.
Europe is “one of the biggest surprises” in terms of rising demand for gas, Tom Earl, chief commercial officer at US LNG developer Venture Global LNG, said at conference in Amsterdam in May. Venture Global, which is building an export terminal in Louisiana, has already signed supply deals with BP Plc and Portugal’s Galp Energia SGPS.

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