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 US commits to further LNG provides for Europe
August 31, 2022

US commits to further LNG provides for Europe

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The US and its companions will ship a further 15 billion cubic metres of LNG to Europe this yr, US President Joe Biden has mentioned.

The president made the dedication following discussions with European Fee President Ursula von der Leyen. The 2 sides have launched a job power to scale back European dependency on Russia.

“And because the EU works to discontinue shopping for Russian fuel nicely earlier than 2030, it can additionally work to make sure further EU market demand for 50 [bcm] of LNG from the USA yearly by 2030,” he mentioned. Europe will work on scaling up capability to retailer fuel, construct extra infrastructure and improve effectivity.

Von der Leyen welcomed the US dedication. This can be a “huge step”, she mentioned, as it can “change the LNG provide we at the moment obtain from Russia”.

Rystad Power’s vice chairman Sindre Knutsson mentioned the US had equipped 25 bcm to Europe in 2021. “As such the 15 bcm goal is unlikely to have little short-term impression however signifies US intentions to produce extra LNG to EU this yr and is prone to inject confidence in Europe fuel provides.”

Scaling up US provides to 50 bcm, the commissioner mentioned, would change one third of Russian fuel flows. Such an enlargement would suggest 35 million tonnes per yr of further liquefaction, Rystad mentioned, requiring an funding of $35 billion.

Emissions impression

The EU and US will work on power effectivity and renewable power to scale back dependence on pure fuel, he mentioned.

“We’re going to spend money on modern options and applied sciences to make the change from fossil fuels. And collectively, we’ll advance using clear and renewable hydrogen to scale back our carbon emissions,” Biden mentioned.

The deal additionally highlighted efforts to chop emissions from US fuel. Knutsson famous that EU patrons had been cautious of US provides owing to ESG issues. “Now nevertheless it seems that power safety has trumped ESG issues at the least briefly. Within the medium time period, this has incentivised US producers to enhance their emission footprint.”

Von der Leyen mentioned LNG infrastructure could possibly be used to import “clear hydrogen sooner or later. So, this funding we’re doing proper now can also be an funding within the decarbonising of our economic system.”

The assertion mentioned the value method ought to “mirror long-term market fundamentals”. It recommended the US benchmark of Henry Hub “and different stabilising elements”.

The European Fee has set a goal of filling home storage to 90% of capability by November 1. The physique will work with member states to be able to present transparency on availability.

The settlement set out the EU’s objective of ending its dependence on Russian fuels by 2027.

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