US Eying EU LNG Market Despite Lack of Infrastructure

The European Union is becoming increasingly dependent on Russian natural gas supply, the assistant secretary for fossil energy at the US Department of Energy said.

Steven Winberg was speaking at a senate committee hearing on Thursday, noting that exports of US liquefied natural gas can be part of Europe’s efforts to diversify its energy supply, Oil Price reported.

"Increasing exports of US LNG to our allies in Europe creates great opportunities for our nation to advance this administration’s goal of strengthening our allies’ energy security,” he said.

The DOE official addressed a meeting of the Committee on Energy and Natural Resources at the US Senate during a hearing to examine the role of US LNG in meeting European energy demand.

Winberg said noted that as EU member states cut down on coal-fired power generation to comply with emission goals, they raise their natural gas dependence, but due to insufficient pipeline expansions and supply routes, Europe is becoming increasingly dependent on Russia for its natural gas supply.

Citing the European Commission’s Quarterly Report on European Gas Markets, he noted that as EU natural gas imports rose by 6% annually in Q4 2017, Russia remained the EU’s top supplier of natural gas, accounting for 43% of natural gas imports, while LNG accounted for 12% of imports.

“The United States is strongly committed to providing Europe with access to strategic, diverse and reliable energy supplies,” he said, pointing out that due to the lack of LNG regasification terminals in most central and southeast European states, they can rarely access LNG supplies through the EU’s collective natural gas distribution network.

“This inadequate gas interconnection infrastructure between European Union member states represents a major obstacle preventing LNG from diversifying supply across the EU,” the DOE official said.

"Russia’s gas giant Gazprom estimates that its deliveries to Europe and Turkey between January and August 2018 rose by 5.6% compared to the same period of last year," Chairman of Gazprom's Management Committee Alexey Miller said at the end of August.

“Europe’s demand for Gazprom’s gas has been remarkably high for three years in a row.”