Portugal PM Wants Sines Port to Expand, Handle More U.S. LNG

Portugal is seeking to expand its deep-water port of Sines to handle greater liquefied natural gas (LNG) shipments from the United States and elsewhere to offset Europe's shrinking domestic output, Prime Minister Antonio Costa said on Monday.

Costa, who spoke at a conference on Portugal-U.S. ties, said the port of Sines, which already has an LNG terminal, could be expanded into a larger hub capable of receiving LNG transhipments, with regasification and underground storage facilities and pipeline connections to the rest of Europe.

Portugal and Spain, Europe's biggest LNG importers, are isolated from mainland European gas markets due to a lack of pipeline infrastructure across the Pyrenees to France which restricts exports.

Expanding pipelines and underground storage sites to hold regasified LNG before it is sold at opportune times could boost the country's role in continental gas trade.

"Europe certainly needs a third point of gas entry, which is what Portugal and the United States can provide. It is in the strategic interests of both countries, but also of the European Union," Costa said.

Sines received its first LNG shipment from the United States in 2016.

The Atlantic port in southern Portugal is the closest deep-water port to the main global transport routes - the Cape Route for European-Asian shipments, the Mediterranean and Trans-Atlantic routes, with the latter due to grow busier as the Panama Canal's capacity is expected to double, Costa said.

"Aside from the port itself, the whole Sines area has exceptional geological conditions to store large quantities of gas for its subsequent distribution throughout the EU," he added.

U.S. LNG exports are ramping up as new plants dotted along the east coast enter service, promising to diversify Europe's gas imports and lessen growing reliance on gas piped from Russia and north Africa.

Reporting By Sergio Goncalves, additional reporting by Oleg Vukmanovic, writing by Andrei Khalip