From S&P Global Platts

The EU will work to double its US LNG imports to at least 8 Bcm/year over the next four years, and seek to make the US a major gas supplier to Europe longer term, the European Commission said Friday.

The EU is the world’s second biggest single gas market after the US, and already imports around 70% of its gas, with Russia its biggest single supplier.

This import share is expected to rise as the EU’s domestic output declines, and the EC is keen to diversify suppliers to avoid over-reliance on Russia.

“US LNG, if priced competitively, can play an increasing role in EU gas supply, enhancing diversification and EU energy security,” it said.

The EU imported 3.3 Bcm of US LNG in 2018, up 50% from 2.2 Bcm in 2017. Total EU gas demand in 2017 was 491 Bcm, according to EC data.

The EU and US plan to hold their first joint Energy Council High Level Forum in Brussels on May 2, specifically to discuss how to move toward “large-scale US LNG exports” to the EU, the EC said.

The forum is to look at competitive pricing, infrastructure investments and technological innovation.

The US has 39 Bcm of liquefaction capacity and is foreseen to add a further 80 Bcm by 2023, the EC said.

It called on the US to lift licensing rules requiring prior approval for exporting LNG, to make it easier to export to Europe.

The EU and US also plan to develop “joint efforts to complete key missing infrastructures and investments in Europe to improve access to LNG,” the EC said.

The EC listed three LNG import terminals currently being built in the EU, plus another five being planned which have EU project of common interest status.

This PCI status gives them access to faster permitting and makes them eligible for EU funding.

The EU and US also want to consult regularly with market operators to promote US LNG as an option, the EC said.

“By strengthening their cooperation on energy matters, the EU and the US will send a signal for all Europe, as well as to the rest of the world, of the advantages of US LNG,” the EC said.

US LNG exports to Europe, including Turkey, surged 75% on the year in February to 411.5 million cubic meters, but were still eclipsed by Russian LNG exports of 1.4 Bcm, up 67%, according to S&P Global Platts Analytics data.

Russia supplies most of its gas to Europe via pipeline, and is building a 55 Bcm/year Nord Stream 2 link directly to Germany across the Baltic Sea. This is planned online by the end of this year, when its transit contract with Ukraine expires.

The US has repeatedly criticized the Nord Stream 2 project for undermining Russian gas transit through Ukraine, and has called on EU leaders to stop it being built.

The EU has no legal power to do this.

Tags:

Legal Notice