EU - what's next?

U.S. LNG export terminals are operating at or above capacity after reaching record flows on Sunday. Asia is typically the top destination for U.S. LNG cargoes, but that has changed this winter with the significant premium for gas in Europe.

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Bleeding Blitva wrote:Uncle Sam nas spašava  
A Flotilla of U.S. LNG Cargoes Is Headed to Fuel-Starved Europe

U.S. LNG export terminals are operating at or above capacity after reaching record flows on Sunday. Asia is typically the top destination for U.S. LNG cargoes, but that has changed this winter with the significant premium for gas in Europe.

The cavalry has arrived

Ten US LNG cargoes have destinations set for Europe, which is struggling with a gas shortage

Twenty more vessels are crossing the Atlantic on path to Europe

(US LNG had been going to Asia and S America)

Via @SergioChapahttps://t.co/Dqv08tLtQ1 pic.twitter.com/hQozCHfLp7

— Stephen Stapczynski (@SStapczynski) December 23, 2021

EUROPEAN ENERGY CRISIS: Eleven associations of European energy-intensive industries (from cement to steel and from fertilisers to paper mills) issue a joint-statement warning about “unbearably high energy prices” and production shutdowns | #EuropeanEnergyCrisis pic.twitter.com/kiEiu4BhAa

— Javier Blas (@JavierBlas) December 22, 2021

Cousin Billy wrote:
Lepa paralela, a zapanjujuća je koincidencija da je Džoni tu pesmu napisao u 21*. godini a sad se završava 2021. godina.

BBC wrote:
Lisbon's City Hall has been fined €1.25m ($1.4m, £1m) for passing protesters' details to the foreign embassies they had been picketing.

Portugal's data commissioner said the mayor's office had committed 225 breaches of demonstrators' personal data between 2018 and 2021.

Their details were shared with the the embassies of several countries, including Russia's, by former Socialist Mayor Fernando Medina's office.

He has apologised for the breaches.

Can US natural gas relieve Europe from Russian supply dependency?
Moves to provide LNG face short and long-term obstacles in terms of infrastructure and shift to clean energy

Derek Brower and Myles McCormick in New York 2 HOURS AGO



The US and EU last week announced a breakthrough deal to wean Europe off Russian natural gas. The “groundbreaking” pact, said Joe Biden, would strip Vladimir Putin of the ability to “coerce and manipulate” the continent’s energy consumers.

The “joint game plan” involves three steps. First, the US will help the EU secure short-term liquefied natural gas supplies to begin displacing Russian gas. Second, Europe will work “toward the goal of ensuring” a bigger market for US gas by 2030. Third, the US would help Europe accelerate its transition to clean energy, eventually reducing its gas demand.

How much more gas has the US offered?

The US said it would strive to add 15bn cubic metres of liquefied natural gas to the EU this year, with more in years to come. It did not specify the origins of the gas, noting it would “work with international partners”.

By comparison, Russia currently exports 155bn cubic metres a year of gas to the EU.

The baseline for the pledged 15bn is not clear. But the US shipped about 22bn cubic metres of gas to Europe in 2021 and has already sent 10bn in the first quarter of this year, according to Refinitiv. All of it is in the form of LNG, gas that has been condensed so it can be carried on a ship.

Some extra US supplies will come from a recently opened export project in Louisiana, the Calcasieu Pass plant. But these volumes were already expected in the market, and plants elsewhere along the coastline are operating at maximum capacity.

So for now, any extra LNG will have to be coaxed to Europe via higher prices, diverting ships originally bound elsewhere. That could prove painful for consumers.

“Any incremental LNG cargoes sent from the US to Europe are more likely a redirection of existing US LNG cargoes — and hence will do little in terms of material ‘price relief’,” said Bank of America.

How can the US get other LNG supplies to Europe?

Most US LNG contracts are not necessarily restricted to a particular destination. So if prices remain high enough in Europe, shippers may keep redirecting cargoes there.

And if the EU succeeds in replacing the roughly 15bn cubic metres of LNG that it currently imports from Russia — a much smaller amount than is imported through pipelines — those seaborne Russian cargoes could in turn flow to other places.

“A big reshuffling is about to happen,” said one industry executive, referring to this possibility.

This is part of the Biden plan. Jake Sullivan, the president’s national security adviser, said the administration would rely on a “cargo diversion strategy”.

But commercial terms still make this plan tricky.

“I think in the shorter term, it’s going to be fairly tough,” said Inosi Nyatta, a partner at law firm Sullivan & Cromwell. “Maybe they’ll have some sort of incentive regime where they incentivise the sellers to renegotiate.”

The US tack to date has been to lean on governments — in big importing countries such as Japan or South Korea, but also in Qatar, which sits with the US and Australia in the top tier of LNG exporters. Freeing up yet more cargoes will “involve a lot of diplomacy”, said a senior administration official.

Does Europe have infrastructure to receive more seaborne gas?

Yes, but not in the right place. Eastern Europe and Germany are most dependent on Russian gas. But most of the available LNG regasification infrastructure is in southern Europe.

Germany has proposed building new terminals to receive LNG, or renting regasification vessels that can float offshore. Either way, the shift from pipeline dependency to LNG dependency will be expensive and take time.

Investors in costly new import terminals — whether taxpayers or capital markets — will need assurances that a transition to cleaner energy won’t simply render these fossil fuel assets worthless in a decade’s time.

Does the LNG pact compromise US climate commitments?

The White House’s promotion of LNG has been welcomed by American fossil fuel producers, which even before Russia’s invasion of Ukraine were touting these exports as a “green initiative” that would allow Asian importers to burn natural gas instead of coal to make electricity.

It is also a huge shift for the EU, which was growing more hostile to gas even before the invasion.

“This is a U-turn from previous EU purchasing decisions as many buyers had stopped negotiating with US developers for LNG due to ESG [environmental, social and governance] concerns,” said Sindre Knutsson at Rystad Energy, a consultancy.

Environmentalists were scathing. “Allowing for the expansion of new and expanded gas export facilities would lock in decades of reliance on risky, volatile fossil fuels and spell disaster for our climate,” said Kelly Sheehan at the Sierra Club.

What about the longer run?

Biden and Ursula von der Leyen, European Commission president, also discussed a bigger plan for the US to ship 50bn cubic metres a year of more LNG to Europe by 2030.

This is feasible on paper. According to the investment bank Cowen, the US government has approved a dozen export projects with a total capacity of 206bn cubic metres a year — about twice current US capacity.

But LNG plants cost billions of dollars and take years to build, and no one expects all 12 of the projects to go ahead. Developers and their financial backers typically want contracts with purchasers — some lasting 20 years or more — before they start ploughing cash into projects.

In its statement with the White House, the European Commission said it would work “toward the goal of ensuring” demand for 50bn cubic metres of US gas — an apparent concession to the LNG industry’s anxieties about future demand.

At the same time, US officials were clear that the longer-term aim was still to stop using fossil fuels, including LNG.

“The true path to energy security runs through clean energy,” said a senior administration official. “The first part is getting Europe off Russian gas. The second part is getting Europe off gas altogether.”