Page 12 - GLNG Week 02 2023
P. 12
GLNG EUROPE GLNG
Energy crisis pushing European
companies into signing long-
term LNG deals with US suppliers
CONTRACTS THE Russian-inspired energy crisis has been construction of its first onshore import termi-
driving relucent European energy companies nals. Uniper and Sefe are among the German
to sign more and more long-term LNG supply firms expected to secure more long-term supply
contracts in 2022 that are undermining Europe deals, following in the footsteps of German util-
Green Deal that aims to reduce emissions to zero ities EnBW Energie Baden-Württemberg and
by 2050. RWE, which signed agreements last year.
Most companies would prefer to sign at most The United States is a viable option for Euro-
10-year contracts that would leave them inside pean buyers due to the limited supplies available.
the zero-emissions deadline, but US firms have The continent accounted for roughly 70% of all
been pushing for longer 15-year deals to main- US LNG exports in 2022, and the United States
tain their profitability and generate investment has the most advanced projects in the world, with
capital for new projects. around 20 either under construction, approved
In recent months, European companies such by regulators or proposed for the country.
as Engie, Galp Energia, Ineos Group and RWE However, Qatar is also increasing its LNG
have all signed 15-year agreements or longer output from 77mn tpy to 126mn tpy this decade,
to purchase US LNG. Furthermore, Trafigura but its relationship with Europe has been com-
Group secured a $3bn loan backed by the Ger- plicated by a bribery scandal involving European
man government to purchase additional gas for lawmakers.
the country. ConocoPhillips has also entered The International Energy Agency (IEA) has
into contracts with QatarEnergy to transport warned that Europe could face a gap of roughly
more of the chilled fuel to Germany. 30bn cubic metres (1 trillion cubic feet) of gas
This trend is expected to greatly benefit US supplies this year, forcing European companies
LNG projects, with sponsors having signed long- into securing supplies well ahead of the 2023/24
term agreements to supply nearly 50mn tonnes heating season. At the same time, EU climate
per year (tpy) of LNG, mainly to Asian buyers laws require emissions to be cut by 55% by 2030
and portfolio players. Europe was only responsi- and the EU is ultimately targeting climate neu-
ble for 11.4mn tpy of this total. Experts estimate trality by 2050.
that Europe will need between 50-75mn tpy of It is expected that Europe will increasingly
long-term LNG supplies from the United States rely on US LNG to replace the decline in Russian
alone to help replace declining imports of Rus- imports and meet the growing energy demand.
sian gas. German companies are taking particular advan-
Nowhere is this more evident than in Ger- tage of the opportunity and are continuing to
many, which is Europe’s largest gas consumer secure long-term supply deals. As European
and had previously been highly dependent on countries work to reduce emissions, the use of
Russian imports. The country has chartered six LNG is expected to play a significant role in their
floating storage and regasification units (FSRUs) energy mix in the coming years.
and is working at a rapid pace to support the
P12 www. NEWSBASE .com Week 02 12•January•2023
