“The two main claims against shipments [of U.S. LNG] to the European market – lack of demand and cost effectiveness – have lost their validity. First, according to the IEA, demand for gas in Europe, contrary to general belief, will double by 2020. Second, LNG prices in the Pacific and Atlantic area have been converging, therefore reducing the cost advantage of selling to the Asian market. U.S. LNG exports would see increasing profit from European markets while at the same time helping its most important allies ensure security.”
“Nevertheless, the EU must meet the U.S. effort by connecting the west to the east [of Europe] through new infrastructure, expanding storage capacity, and removing the barriers to a common [EU] energy market. In response, according to Platts, the U.S. by 2020 could be exporting to Europe over 100 Bcm/year of LNG, which would meet one quarter of the market demand. These statistics highlight how Europe could obtain higher regional and energy security.”
“Under a year ago, U.S. LNG exports to Europe seemed unfeasible. Today they are a reality. Demand for gas is expected to grow in the next decade. Prices, if kept around $5 million Btu, allow for US exports and competition with Russia. Europe could gain greatly. An increase in LNG imports could provide a cushion for the next five years, while Europe, in its rush to guarantee its security, invests in pipelines, storage capacity, LNG terminals, and integrating the markets. Europe has a lot to gain from the unfolding of current events. A Trump presidency can push European institutions to begin thinking of an independent future, while the Russian threat can bring all European countries together to diversify supplies of gas and achieve energy security.”
*This is an excerpt from: The importance of US LNG Exports to Europe, by Valerio della Torre di Sanguinetta, posted on December 6, 2016 on www.geopoliticalmonitor.com