US, EU announce partnership to reduce Russian energy reliance

The US and EU announced a partnership to reduce Europe’s dependence on Russian energy that will increase shipments of liquefied natural gas (LNG) to Europe by 15 billion cubic metres this year.

“Today we’ve agreed on a joint gameplan toward that goal” of reducing European reliance on Russian gas, US President Joe Biden said at a joint press conference with Ursula von der Leyen.

Russian energy is a key source of income and political leverage for Moscow with almost 40% of the European Union’s natural gas comes from Russia to heat homes, generate electricity and power industry.

“We want, as Europeans, to diversify away from Russia,” European Commission President Ursula von der Leyen said, adding that the deal would secure supplies for the years ahead.

The US and EU announcement came after three western summits, with NATO, the G7 and European Union all meeting on Thursday.

Biden travelled to Brussels for the meetings and will head to Rzeszów in Poland later on Friday before travelling to Warsaw where he will meet with Polish President Andrzej Duda.

Getting more liquefied natural gas to Europe could be difficult, even though the US has been dramatically increasing its exports in recent years.

Many export facilities are already operating at capacity, and most new terminals are still only in the planning stages.

Most US shipments already go to Europe, according to the Centre for Liquefied Natural Gas, an industry lobbying group. Although much of the supply is already contracted out to buyers, there are still opportunities to shift its destination.

“The US is in a unique position because it has flexible LNG that can be rerouted to Europe or to Asia, depending on who’s willing to pay that price,” said Emily McClain, gas markets analyst at Rystad.

Even if the US can ship more gas to Europe, the continent may struggle to receive it. Import terminals are located in coastal areas, where there are fewer pipeline connections for distributing it.

Even if all Europe’s facilities were operating at capacity, the amount of gas would likely be only about two-thirds of what Russia delivers through pipelines.