March 25 (Reuters) – America, the world’s prime pure fuel producer, desires to ship extra liquefied pure fuel (LNG) to Europe to assist its allies break their dependence on Russian fuel after Moscow invaded Ukraine on Feb. 24.
On Thursday, U.S. President Joe Biden promised the USA would ship not less than 15 billion cubic meters (bcm) extra LNG to Europe this yr than deliberate earlier than, sources accustomed to the matter mentioned. learn extra
That quantity – 15 billion cubic meters (bcm) – converts to about 1.5 billion cubic ft per day (bcfd). For context, 1 billion cubic ft is sufficient to warmth 5 million U.S. houses for a day.
HOW MUCH LNG DOES THE UNITED STATES EXPORT?
America, which produces 96.7 bcfd of fuel, has the capability to supercool about 12.7 bcfd into liquid for transportation by tanker.
All seven U.S. LNG export vegetation, nonetheless, are at present working at capability and liquefying about 12.7 bcfd of fuel. So, irrespective of how excessive international costs rise, the U.S. can’t produce anymore LNG – in the intervening time.
About 24%, or round 2.4 bcfd, of U.S. LNG exports went to Europe in 2021, in response to information from Rystad Vitality.
America has already equipped an additional 0.8 bcfd from January to February, in comparison with the identical interval a yr in the past.
“The U.S. can simply exceed this 15 bcm (1.5 bcfd) goal, as European worth indicators … are more likely to far exceed Asian spot costs,” Sindre Knutsson, vp at Rystad Vitality, mentioned in a be aware.
U.S. processing capability was on observe to rise to round 13.1 bcfd by the tip of 2022 as extra liquefaction trains at Enterprise World LNG’s Calcasieu Cross export plant in Louisiana enter service.
WHAT DOES EUROPE IMPORT FROM RUSSIA?
Russia produced about 67.9 bcfd of fuel in 2021 and exported 24.4 bcfd, of which nearly 75% (18.3 bcfd) went to Group for Financial Co-Operation and Growth (OECD) international locations in Europe. The OECD is a membership of principally wealthy international locations.
SO, CAN THE UNITED STATES GET MORE GAS TO EUROPE?
Sure, however it could not equal what Russia sends to Europe, and it’ll largely contain rerouting current shipments.
“We anticipate near-term measures to help European LNG imports to depend on the reallocation of current provide,” analysts at Goldman Sachs mentioned.
A senior U.S. administration official mentioned the trouble will contain preparations with allies all over the world, each producers and shoppers, to route shipments to Europe.
Goldman Sachs mentioned “such a relocation to Europe is already taking place” as a result of European fuel costs have been among the many highest on this planet for the previous few months.
Analysts mentioned governments can discover methods to encourage tankers to maintain going to Europe. Within the short-term, governments may present subsidies to allow European utilities to pay extra for LNG cargoes or the governments may present the additional cash on to shippers to encourage them to ship extra cargoes to Europe.
Nevertheless, Europe’s LNG terminals have restricted accessible capability to soak up additional provide from the USA or different main producers within the occasion fuel from Russia is disrupted. learn extra
Reporting by Scott DiSavino and Marwa Rashad;
Enhancing by Marguerita Choy
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