Brussels, January 28 - Neftegaz.RU. So far this winter, Europe has been the biggest buyer of U.S. LNG, and despite the fact that the key reason has been profit rather than politics, U.S. LNG cargoes have been increasing its share of a market dominated by pipeline supplies from Russia and Norway, a Reuters analysis showed.
U.S. officials and LNG industry managers have expressed confidence that the U.S. can compete with Russia on the European natural gas market, of which Gazprom holds more than a 3rd. The U.S. Administration has been keen to sell American LNG to European countries to help them diversify away from Russia’s natural gas dominance.
In Eastern Europe, Poland and Lithuania - which see reducing Russian gas dependence as an issue of national security - have signed LNG supply deals with U.S. companies. In the rest of Europe, however, it’s the current market and prices that dictate how much U.S. LNG will be shipped.
With Asian LNG prices at their weakest in 3 years so far this winter, U.S. LNG cargoes have found home in Europe, which is traditionally viewed as the market of last resort for LNG suppliers. Currently, Europe is the largest buyer of U.S. LNG after shipments surged 5-fold compared to the previous winter season, according to the Reuters. Europe overtook Mexico and South Korea as the single biggest destination for U.S. LNG exports.
In the Q4 of 2014, as winter approached in the northern hemisphere, total U.S. LNG exports surged, and Europe has been the biggest buyer in the past few months, according to shipping data from Refinitiv Eikon compiled by Reuters.
The key reason for the surge in European imports of U.S. LNG has been the fact that Asian LNG prices this winter have been the lowest in at 3 years as major buyers - especially China - stockpiled gas well ahead of the winter. Milder winter weather in some parts of Asia and high stockpiles mean that there is currently little appetite for spot cargoes.
Author: Tsvetana Paraskova
