Page 7 - GLNG Week 37 2022

GLNG COMMENTARY GLNG

Targeting Europe
These developments come amid rising concerns gas to LNG for transport to Europe.
over tight supply of gas over the coming winter. Chevron’s vice president for midstream, Colin
Europe has rushed to replenish its stocks in Parfitt, told media this week that the company
anticipation of ever-declining deliveries of pipe- is now more of a global player and is seeking
line gas from Russia. For both US and Chinese to meet some of Europe’s growing demand. He
LNG players, this represents an opportunity to identified the US and the Eastern Mediterranean
sell volumes at a higher profit. as being among the leading regions that could be
Around 70% of what Cheniere Energy – targeted for this purpose.
the US’ largest producer of LNG – has gone to
Europe this year, for example. And others that do What next?
not export LNG from the US are still nonethe- One challenge for the US, however, is that it
less eyeing Europe, including Chevron, which could see more domestic demand for its gas out-
recently signed supply deals to buy US LNG put over the winter. Looking further ahead, new
from Cheniere and Venture Global LNG. The liquefaction capacity is also set to come online
super-major already has a significant presence in in the next couple of years that could put fur-
the Asian LNG market thanks to its operations in ther pressure on the US’ gas industry to produce
Australia, from where it primarily supplies major more.
buyers of the super-chilled fuel such as Japan and The US is likely to keep targeting Europe for
South Korea. now, but over the longer term its LNG will not be
However, supplying Europe is easier from enough to supply Europe in the absence of Rus-
elsewhere, and Chevron is now seeking to add sian gas, and may also cause additional supply
assets that are better positioned to meet Euro- pressures at home. Further realignment of global
pean demand. It also has upstream assets in the LNG and pipeline gas trade flows will likely be
Permian Basin, and could seek to convert that needed. For now, though, they remain in flux.™

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