Firstly, the European Union made significant progress to replace Russian natural gas. Although, U.S. LNG projects may be the key to rebalancing energy markets on the continent, industry groups highlighted in a new analysis.
Secondly, analysts found Europe’s demand for U.S. liquefied natural gas could outpace previous estimates from earlier in the year.
Europe´s demand
Moreover, the assumption on the Nord Stream 1 system flows. It halted since the beginning of the month. I twill be absent from the European market for the foreseeable future. Rystad predicted Europe’s demand for LNG is projected to increase 150% from 2021-2040.
That could mean growth in European LNG demand will more than double the 50 Bcm/year outlined in the March joint agreement between the Biden administration and the EU. Also, analysts also projected LNG would meet 50% of Europe’s natural gas demand through 2030, before growing to 75% of demand by 2040.
To harness the power of U.S. LNG, we need smart and consistent policy support here at home, including strengthening domestic pipeline networks and energy export facilities, that will ensure both American consumers and global allies have access to the reliable energy that powers our modern world.
API’s Dustin Meyer, vice president of natural gas markets.
The United States exported record amounts of petroleum products in the first half of 2022.
LNG
In addition, researchers found that developing LNG capacity in the United States expected to come online by the end of the decade outpaced projects planned in the rest of the world.
However, Rystad projects that the addition of capacity from U.S. terminals currently under construction and all proposed projects that are permitted still wouldn’t meet European LNG demand after Russian imports are expected to end in 2027.
The report outlined storage improvements and European pipeline projects that could improve domestic supply. But it also advocated for U.S. transmission and export permitting reforms to increase global LNG capacity.
New alliances
Since Russia’s invasion of Ukraine, the EU has seen a boost in production and exports from Norway. Countries have also secured new supply partnerships with Israel and Egypt, and possible pipeline projects in the Eastern Mediterranean.
While new alternative supplies help the EU meet its goal of phasing out Russian Gas; rapid additions to global LNG capacity will be needed to help rebalance European markets.
Finally, the European Commission is expected to deliver policy outlines for its natural gas plan. It will include energy pricing schemes to bring economic relief and encourage investments in renewables.
To read more about U.S. energy production, clic here.
