US to boost supplies of liquefied natural gas to EU
The US is finalising a plan to supply the EU with up to 15bn additional cubic metres of liquefied natural gas by the end of 2022, according to three people familiar with the matter.
The agreement aims to help the EU reduce its dependence on natural gas from Russia, with the bloc racing to curb Russian imports by two-thirds this year.
LNG deliveries from the US would go towards a goal, set out by the EU this month, of replacing 50bn cm of gas currently supplied by Russia with alternative supplies. In 2021, the US supplied Europe with 22bcm, according to EU data.
US president Joe Biden and European Commission president Ursula von der Leyen hope to announce the agreement on Friday morning.
“It is about additional LNG from the United States for the European Union, thus replacing the Russian LNG we had so far,” Von der Leyen said on Thursday.
The White House declined to comment.
The EU is under intense pressure to bar imports of Russian energy, but German chancellor Olaf Scholz has warned against an immediate ban on the country’s fossil fuels, saying such a move could trigger a recession.
German officials say a steep reduction in Russian gas imports this year would achieve the same goal as sanctions.
The EU set out its plans to import an extra 50bn cm of LNG from global producers including the US, Qatar and Egypt this month, but some analysts have warned that the plan is unrealistic.
Officials briefed on the US plan stressed that the ultimate amount of LNG supplied to the EU would depend on commercial contracts.
Much of US LNG output is already committed to countries around the world, particularly in Asia.
Mike Yarwood, senior research fellow at Oxford Institute for Energy Studies, said Europe would have to steel itself to pay higher gas prices for years to come to achieve its targets.
Europe’s spare LNG import capacity is concentrated on the Iberian peninsula but Spain has poor pipeline connections to shift imported gas to northern Europe.
Eastern European nations most heavily dependent on Russian gas lack the infrastructure to easily benefit from LNG imports with nearby terminals already operating at capacity, meaning they would struggle to increase imports much further.
Additional reporting by Harry Dempsey in London