The European Union and the United States are selected to unveil a deal on Friday to provide Europe with more US liquefied natural gas (LNG). Sources informed the Reuters news agency that the European bloc fast seeks to curb its reliance on Russian fossil fuels.
The invasion of Ukraine by Russia, Europe’s top gas supplier, compelled already-high energy prices to record and has prompted the EU to commit to cutting Russian gas use by two-thirds this year by hiking imports from other countries and fast-expanding renewable energy.
President Joe Biden, who attended the EU leaders summit in Brussels on Thursday, pledged that the US would deliver at least 15 billion cubic meters (bcm) more LNG to Europe this year. Sources familiar with the matter said.
One of the sources counted the deal would also include higher US LNG exports to the EU in 2023.
But since US LNG plants are already producing at full capacity, analysts said most of the other gas going to Europe would have to arrive from exports that would have gone to other parts of the world.
Gas prices improving
In a report, analysts at Goldman Sachs said that they expect near-term measures to support European LNG imports to rely on the reallocation of existing supply, noting such a relocation to Europe is already happening because European gas prices have recently improved months been the highest in the world.
Jason Feer, global head of business intelligence at Poten & Partners, an energy and shipping consultancy, spoke little new LNG export capacity is anticipated to enter service in the US this year.
Russia is the EU’s top gas supplier, shipping 155 bcm of gas to the EU in 2021. Most of that arrived through pipelines, and 15 bcm was LNG.