Europe, China race to lock in LNG shipments from United States
London | A race between European and Chinese energy groups to lock in shipments of liquefied natural gas from the US is driving investment in a range of export projects that will boost a market facing a potential supply shortage.
The growing number of long-term contracts signed by European and Chinese buyers will help the US to expand export infrastructure to bring LNG supply online in the next two to three years.
Together Europe and China accounted for nearly 40 per cent of US LNG supply contracts agreed between 2021 and late June 2023. Bloomberg
European demand for LNG – gas that is cooled to liquid form for safe storage and transport by sea or road – has risen sharply during the war in Ukraine as the region scrambled to replace gas that came from Russia through pipelines.
Demand for the gas has also increased despite pressure to switch to renewable energy to meet net zero emissions targets, creating a tight market and causing prices to surge last year.
In the past few weeks, US LNG exporter Cheniere signed a 15-year deal to supply Norway’s Equinor, and a contract for more than 20 years with China’s ENN.
In addition, rival Venture Global LNG inked a 20-year deal with Germany’s Securing Energy for Europe (SEFE), while France’s TotalEnergies bought a $US219 million ($328 million) stake in a Texas terminal to transport LNG, which is being developed by Houston-based energy group NextDecade.
The announcements add to a steady stream of deals between US exporters and European or Chinese entities over the past few years.
Together Europe and China accounted for nearly 40 per cent of the US’s LNG supply contracts agreed between 2021 and late June 2023, data from S&P Global Commodity Insights showed. China accounted for 24.4 per
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