"US Strikes Deal With EU To Boost LNG Exports, Reduce Bloc's Dependence On Russian Gas" - Zero Hedge

[Tom Nolan + 2,441]

After EU leaders regrouped on Friday for the second day of a Brussels summit organized to allow them to discuss strategies or ratcheting up the pain on the Russian economy (which is already facing the most stringent international economic sanctions ever applied to a major world power), President Biden has confirmed that the US and EU have agreed on a new scheme to increase exports of American LNG to the Continent.

https://www.zerohedge.com/energy/us-strikes-deal-eu-boost-exports-lng-reduce-blocs-dependence-russian-gas

US Strikes Deal With EU To Boost LNG Exports, Reduce Bloc's Dependence On Russian Gas

by Tyler Durden

Friday, Mar 25, 2022 - 06:11 AM

After EU leaders regrouped on Friday for the second day of a Brussels summit organized to allow them to discuss strategies or ratcheting up the pain on the Russian economy (which is already facing the most stringent international economic sanctions ever applied to a major world power), President Biden has confirmed that the US and EU have agreed on a new scheme to increase exports of American LNG to the Continent.

In a plan that resembles Jamie Dimon's call for a "Marshall Plan for Energy", the US and the EU on Friday agreed to ship an additional 15 billion cubic meters of LNG to the 27-nation bloc this year. The shipments will consist of supplies from the US and "elsewhere" (i.e. Canada).

 

Of course, that sum still wouldn't be enough to completely wean the bloc off its reliance on Russia imports. In fact, it only covers roughly two-thirds of the record 22 billion cubic meters of LNG the bloc imported last year.

As we noted earlier, Russia supplied 25% of all oil imported by the EU, which is three times more than the second-largest trade partner, and even larger quantities of natural gas, as data from Eurostat reflect.

Source: Visual Capitalist

For those who aren't familiar with the mechanics of importing natural gas, the fuel can be tricky to export by ship. Unlike other fossil fuels like crude and coal, natural gas must be cooled into liquid form, packed onto a tanker, then carefully "re-gasified" at special facilities. On the other hand, the natural gas that flows through pipelines like Nord Stream 2 avoids this cumbersome process entirely.

Unfortunately for the Europeans, the new plan could take years to implement, raising the possibility of further increases in European natural gas prices.

But while the Biden Administration has generally been hostile to the American energy industry, the deal virtually guarantees new markets for American LNG, incentivizing domestic producers to expand capacity - and quickly.

At present, the US is the world’s largest natural gas producer, and in January and December, it was the largest exporter of LNG (that is, natty gas that doesn't travel through pipelines). Already, nearly 70% of those LNG shipments went to the 27 nations of the EU, the UK and Turkey.

Just yesterday, some European leaders were dismissing reports of a potential Russian energy import boycott as "wrong" and even "harmful" (since they could induce more panic-buying of energy, which in turn would send prices higher). But today, German news magazine Der Spiegel reported that Germany's Economy Ministry wants to halve the country's dependence on Russian energy by mid-year, while becoming independent of Russian coal by the fall. By 2024, Europe's largest economy hopes to be fully independent of Russian gas.

"By the middle of the year, Russian oil imports to Germany are expected to be halved," Spiegel quoted the memo as reading. "By the end of the year, we aim to be almost independent."

"By autumn, Germany can be independent of Russian coal."

Ministry officials have already "optioned" three floating LNG terminals.

It's an ambitious plan, but it still wouldn't be enough to justify a complete boycott.

While oil and gas are critical for humanity's survival, Europe also depends on Ukraine and Russia for imports of wheat, fertilizer and other soft commodities that are vital to guaranteeing sufficient food supplies. While Jamie Dimon's "Marshall Plan for Energy" appears to have come together relatively quickly, how much longer will it be before the US is also forced to share some of America's (increasingly precious) food supplies with the Europeans as well? Because even President Joe Biden acknowledged yesterday that Continental food shortages would likely materialize as a "necessary price" of the EU's sanctions.

SEE ALSO...

https://oilprice.com/Energy/Energy-General/The-US-Is-Preparing-To-Send-Major-LNG-Shipments-To-Europe.html

The U.S. Is Preparing To Send Major LNG Shipments To Europe

By ZeroHedge - Mar 24, 2022, 1:00 PM CDT

• The Biden Administration is expected to announce a major initiative to send LNG to Europe.
• The announcement is part of a dramatic effort to reduce the region’s dependence on Russian energy.
• According to one US official, it is intended to ensure supplies of American natural gas and hydrogen for Europe.

Join Our Community

Oil dipped about $1 after the Washington Post reported that the Biden administration and European Union are expected to announce a major initiative to direct shipments of liquefied natural gas to Europe during the US president’s visit to Brussels this week.  The announcement would come as European officials have asked the US to do more to help them cut their dependence on Russian energy sources.

The announcement, part of a "dramatic effort" to deprive Russia of leverage as it continues to batter Ukraine, would mark an unusual move to reorder the world’s energy flow — a shift that could have an impact long after the war is over. It comes as European officials have asked the United States to do more to help them cut their reliance on Russia for oil and natural gas.

Biden’s national security adviser, Jake Sullivan, said an agreement would be announced as soon as Friday. According to one US official, it is intended to ensure supplies of American natural gas and hydrogen for Europe.

Sullivan told reporters aboard Air Force One on Wednesday:

A major priority for both the president and his European allies is to reduce the dependence of Europe on Russian gas, full stop, and the practical road map for how to do that – what steps have to be taken, what the United States can contribute, what Europe has to do itself.

Speaking to EU lawmakers in Brussels on Wednesday, the European Commission president, Ursula von der Leyen, said all EU members “can contribute in reducing our dependency on Russian gas”.

 

Of course, sending an LNG flotilla to Europe is nothing new and this plan has been floated for a while - a well-known snag here is that Germany has no LNG terminals to onboard any shipments, and so will need at least 1-2 years to build the required facilities at a cost in the billions. It's probably also why after surging more than 20% yesterday following news that Putin will only accept rubles for Russian gas purchases, European gas prices have barely budged following the WaPo report.

By Zerohedge.com

More Top Reads From Oilprice.com:

• Saudi Arabia Considers Ditching The Dollar For Chinese Oil Sales
• War Premium Evaporates As Oil Prices Crash Below $100
• The Supply Shortage That Could Derail The Electric Car Boom

[Tom Nolan + 2,441]

https://oilprice.com/Energy/Natural-Gas/EU-Inks-LNG-Deal-With-US-To-Replace-Russian-Gas.html

EU Inks LNG Deal With U.S. To Replace Russian Gas

By Irina Slav - Mar 25, 2022, 9:00 AM CDT

• The United States will deliver at least 15 billion cubic meters of liquefied natural gas to the EU this year more than previously planned.
• U.S. LNG exports to the continent have increased drastically.
• Analysts: U.S. LNG producers cannot produce all the LNG Europe will need.

Join Our Community

The European Union and the United States have announced a deal for more U.S. liquefied natural gas exports to the EU as the latter seeks to replace Russian supplies, on which it is dependent.

According to the terms of the deal, the United States will deliver at least 15 billion cubic meters of liquefied natural gas to the EU this year more than previously planned, the White House said in a fact sheet. For context, Russia exported over 59 billion cubic meters of natural gas to Germany alone last year, a record high.

"The European Commission will work with EU Member States toward the goal of ensuring, until at least 2030, demand for approximately 50 bcm/year of additional U.S. LNG that is consistent with our shared net-zero goals. This also will be done on the understanding that prices should reflect long-term market fundamentals and stability of supply and demand," the fact sheet also said.

Meanwhile, U.S. LNG exports to the continent have increased drastically, with as much as 70 percent of them going to Europe in the past two months, up from a previous 30-percent share, according to Evercore ISI.

"The recently announced EU energy supply reconfiguration could be the largest change in European energy consumption since the end of the Second World War," said Evercore ISI analyst Sean Morgan earlier this week, as quoted by American Shipper.

According to other analysts, U.S. LNG producers cannot produce all the LNG Europe will need, so they will need to redirect cargo from other buyers to satisfy Europe's gas demand.

"We expect near-term measures to support European LNG imports to rely on the reallocation of existing supply," Goldman Sachs said in a recent report cited by Reuters, adding that "such a relocation to Europe is already happening." The reallocation was made possible by record-high gas prices in Europe, which have also made U.S. LNG competitive with pipeline gas.

Yet a lot of U.S. LNG is already contracted, one analyst noted, so European buyers will have to pay even higher prices.

"But almost all of it [LNG] in the U.S. already belongs to somebody. It is under contract," the head of business development at energy and shipbrokers Poten & Partners told Reuters. "If Europe wants more LNG, they are going to have to pay for it," Jason Feer said.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:

• Big Oil Is No Longer “Unbankable”
• The World Could See A Record-Breaking Oil Supply Shock
• Huge Russian-Run Iraqi Oilfield May See Near-1 Million Bpd Output Boost

[footeab@yahoo.com + 2,129]

Until the LNG terminals increase capacity massively and the pipelines attached to said terminals and the distribution system of said... LNG quantity to Europe from USA has already reached its zenith until more infrastructure is built on the USA's end.  Maybe Qatar has excess... I doubt it. 

[notsonice + 1,062]

1 hour ago, footeab@yahoo.com said:

Until the LNG terminals increase capacity massively and the pipelines attached to said terminals and the distribution system of said... LNG quantity to Europe from USA has already reached its zenith until more infrastructure is built on the USA's end.  Maybe Qatar has excess... I doubt it. 

oh foot in the mouth did you miss what is happening in the US in 2022????

 

 

The following new LNG export capacity additions will come online by the end of 2022, according to announced project plans:

• Train 6 at the Sabine Pass LNG export facility. Train 6 will add up to 0.76 billion cubic feet per day (Bcf/d) of peak export capacity. Train 6 began producing LNG in late November; the first export cargo from this train is expected to be shipped before the end of 2021.
• Calcasieu Pass LNG. This new export facility has 18 liquefaction trains with a combined peak capacity of 12 million metric tons per annum (1.6 Bcf/d). Commissioning activities at Calcasieu Pass LNG started in November 2021; the first LNG production is expected before the end of this year. All liquefaction trains are expected to be operational by the end of 2022.

• The United States will deliver at least 15 billion cubic meters of liquefied natural gas to the EU this year more than previously planned.

now do you need help with the math????

cf in a cubic meter 35.3

at Calcasieu    ........1.6 bcf /day means 584 billion cubic feet in a year or 16.54 BCM in a year

 

and at Sabine        .76 bcf /day means 277 BCF/yr or 7.86 BCM/yr

 

now add the two  together   ......16.54 plus 7.86   equals???? ok I will help you out again  24.4 BCM/yr

so is 24.4 bigger than 15????? do you need help??? so it appears the 2 plants new capacity can meet the increase of 15 BCM/yr as announced...

Once again you babble BS with your statement.....Until the LNG terminals increase capacity massively and the pipelines attached to said terminals and the distribution system of said... LNG quantity to Europe from USA has already reached its zenith....

 

PS the pipelines are already in place and the gas has been procured......now maybe you will understand why the nat gas prices increased in the US....Got it????

 

Edited March 26, 2022 by notsonice

[footeab@yahoo.com + 2,129]

6 hours ago, notsonice said:

oh foot in the mouth did you miss what is happening in the US in 2022????

 

 

The following new LNG export capacity additions will come online by the end of 2022, according to announced project plans:

• Train 6 at the Sabine Pass LNG export facility. Train 6 will add up to 0.76 billion cubic feet per day (Bcf/d) of peak export capacity. Train 6 began producing LNG in late November; the first export cargo from this train is expected to be shipped before the end of 2021.
• Calcasieu Pass LNG. This new export facility has 18 liquefaction trains with a combined peak capacity of 12 million metric tons per annum (1.6 Bcf/d). Commissioning activities at Calcasieu Pass LNG started in November 2021; the first LNG production is expected before the end of this year. All liquefaction trains are expected to be operational by the end of 2022.

• The United States will deliver at least 15 billion cubic meters of liquefied natural gas to the EU this year more than previously planned.

now do you need help with the math????

cf in a cubic meter 35.3

at Calcasieu    ........1.6 bcf /day means 584 billion cubic feet in a year or 16.54 BCM in a year

 

and at Sabine        .76 bcf /day means 277 BCF/yr or 7.86 BCM/yr

 

now add the two  together   ......16.54 plus 7.86   equals???? ok I will help you out again  24.4 BCM/yr

so is 24.4 bigger than 15????? do you need help??? so it appears the 2 plants new capacity can meet the increase of 15 BCM/yr as announced...

Once again you babble BS with your statement.....Until the LNG terminals increase capacity massively and the pipelines attached to said terminals and the distribution system of said... LNG quantity to Europe from USA has already reached its zenith....

 

PS the pipelines are already in place and the gas has been procured......now maybe you will understand why the nat gas prices increased in the US....Got it????

 

Oh no science, can you math/read bro?  Germany dear foot in mouth imported 59BCM from RUssia.... EU needs an order of magnitude higher than what the USA is producing.  And no, the needed increase is not a pathetic (whatever you typed).

No Shit Sherlock, we all know LNG terminals have been expanding and has allowed a vast increase in LNG % increase.  The increase is a fart in the wind compared to requirements. 

But hey, apparently grade school math is too difficult for you and NSDP.