Most of US LNG is already shipped to Europe, which accounts for 70% of this year’s exports. Photo: Europapresse.
The European Union’s plan to reduce its dependence on Russian natural gas in response to Moscow’s military operation in Ukraine could be a “goldmine” for US exporters eager to eye the prospect of rising demand from European customers, he said an article published in the Financial Times on Monday.
US liquefied natural gas (LNG) companies expect further growth in energy demand from European consumers, as shown by recent increases in their shares and strengthened trade deals, the British newspaper notes.
In fact, most of US LNG is already being shipped to Europe, which accounts for 70% of this year’s exports, adds the Financial Times.
“The long-term use of LNG in the US is unquestionable,” said Freeport CEO Michael Smith. “Europe recognizes that it needs LNG, although it believes that it can get out of the energy crisis with renewable energies alone. It’s a big and positive step,” he added.
Freeport LNG operates one of the largest LNG export and liquefaction facilities in the United States.
European Commission President Ursula von der Leyen and US President Joe Biden announced an agreement last March under which the European Union would guarantee long-term demand of 50 billion cubic meters of LNG per year to offset part of the gas Gas that the community bloc imports from Russia.
However, according to the Financial Times, the US is unable to immediately replace all Russian supplies.
The prospects for increasing LNG production are uncertain as development costs rise as US gas prices rise and new projects can take years to come to fruition.
In addition, before construction of a new liquefaction project can begin, customers are often required to sign purchase agreements lasting two decades or more.
(With information from RT)