US LNG Opens Floodgates to Europe
The United States has nearly tripled its natural-gas exports to the European Union (EU) since July and signed new licenses seeking to establish American energy as an EU mainstay. US exports of LNG surged following a meeting between Donald Trump and Jean-Claude Juncker in July 2018.
In their Joint Statement of 25 July 2018 in Washington D.C., President Juncker and President Trump agreed to strengthen EU-U.S. strategic cooperation with respect to energy. They came in particular to an understanding on the benefits of expanded exports of U.S. liquefied natural gas (LNG) to the EU gas market.
Since the first cargo in April 2016 U.S. LNG exports to the EU have been increasing substantially and have seen a steep rise after President Trump and President Juncker's meeting in July 2018 increasing by 272%. As a result, March 2019 recorded the highest volume ever of EU-U.S. trade in LNG with more than 1.4 billion cubic metres.
This week, top energy business executives from both sides of the Atlantic meet in Brussels to discuss further ways to enhance LNG trade, the role that competitively-priced U.S.-LNG can play on the EU market and the growing opportunities for using LNG in the transport sector.
This High-Level Energy Forum, opened by EU Commissioner for Climate Action and Energy Miguel Arias Cañete and U.S. Secretary of Energy Rick Perry, gives American and European businesses the opportunity to chart further actions to fully harvest commercial opportunities in the LNG trade.
These will range from new infrastructure for upstream development, liquefaction and re-gasification to pipeline network distribution as well as new business models and financial instruments in a changing market. It also provides U.S. and European decision-makers from companies in the LNG sector with match-making and deal-making opportunities.
The gathering, which is a clear signal of the strengthened of EU-U.S. cooperation in the field of energy, provided a further occasion for EU Commissioner Miguel Arias Cañete to meet with the U.S. Secretary of Energy Rick Perry and discuss broader aspects of EU-US energy relations.
Commissioner for Energy and Climate Miguel Arias Cañete said: “Energy security is one of the key success stories of our transatlantic cooperation and one where we both have a keen mutual interest. It is therefore our common objective to further deepen our energy cooperation. Natural gas will remain an important component of the EU's energy mix in the near future as we move towards cleaner sources of energy. Given our heavy dependence on imports, U.S. liquefied natural gas, if priced competitively, could play an increasing and strategic role in EU gas supply.”
U.S. Secretary of Energy Rick Perry said: “Today's discussion follows on last July's joint statement by President Trump and President Juncker on strengthening our strategic energy partnership. We share a history of transatlantic cooperation, through good times and bad, and together we promote our heritage of freedom. The strength of this relationship can particularly be seen in energy. When it comes to natural gas, we each have what the other needs to derive tremendous mutual benefit from advancing our energy relationship.”
Increased imports of U.S. LNG contribute to the EU's goal of diversification of energy supply. Competitive, fluid and stable, the EU gas market is the second biggest single gas market in the world after the U.S.
European gas imports are projected to increase in the years to come as its domestic production is decreasing, while demand is projected to remain at a comparable level as gas has been identified as an important transition fuel in the EU's efforts to decarbonise its economy.