European buyers aren’t committing to long-term LNG supply agreements with U.S. exporters despite the ongoing EU phase-out of Russian gas imports and the supply crisis in the Middle East.
U.S. developers and proponents of new LNG export facilities in America have been trying to lock in long-term supply deals with European importers, with little success so far this year, U.S. executives have told Bloomberg.
The Europeans are interested in discussions, but not really committing to long-term supply deals, according to the American LNG exporters.
European importers are concerned about becoming too reliant on U.S. gas and simply replace decades-long reliance on Russia with a new reliance on America.
Europe isn’t budging to signing many long-term U.S. LNG supply deals, even in the face of a tighter global LNG market than expected before the Iran war, and the phase-out of Russian gas by 2027.
Set OilPrice.com as a preferred source in Google .
The EU banned, effective April 25, imports of LNG from Russia under spot contracts as part of its wider stepwise ban on all Russian gas imports by the end of 2027. A full ban will take effect for LNG imports from the beginning of 2027 and for pipeline gas imports from the autumn of 2027, under the EU’s plan to ditch Russian gas.
The EU has raised its dependence on U.S. LNG and it could source as much as 80% of its LNG imports from the United States by 2028, according to forecasts by the Institute for Energy Economics and Financial Analysis (IEEFA) published last month.
A number of European energy utilities have recently expressed interest in buying the future output of the Ksi Lisims LNG project, which will be Canada’s second export facility for liquefied gas.
The Ksi Lisims LNG facility already has offtake agreements for 5 million tons in annual production, but the companies behind the project want to secure commitments for another 3 to 4 million tons, the chief executive of Western LNG, the project leader, told Reuters in an interview.
By Michael Kern for Oilprice.com
More Top Reads From Oilprice.com
- Norway Pitches Arctic Resources as Key to EU Energy Security
- Russian Governors Rush to Deny Fuel Crisis as Rationing Spreads
- Nigeria’s Crude Oil Production Hits 15-Month High
