On May 2, 2019, the 1st business forum of the “EU-US Energy Council” entitled “Towards Large Scale US LNG Exports to the EU” was held in Brussels. The event was attended by the representatives of the European Commission, energy ministers of the EU countries, representatives of the US Department of Energy and representatives of American and European LNG export and import companies.
The “EU-US Energy Council” is a key instrument for strengthening and coordinating transatlantic gas cooperation. By the end of 2020, the US predicts an increase in US export capacity to 112 billion cubic meters of LNG per year.
According to Miguel Arias Cañete, the Commissioner for Climate Action and Energy, the main goal of the forum was to establish business contacts between energy companies of the EU and the USA, discuss the trends and pace of development of the transatlantic logistics infrastructure of the liquefied gas market in the EU and the USA, ways of transporting American LNG to the EU countries, including those countries which have no access to the ocean and are located in Central and Eastern Europe, as well as mechanisms of pricing policy for liquefied natural gas in the EU.
According to M. Cañete, the European Commission is convinced that natural gas will remain an important part of the EU energy balance by 2030. The gas is intended to support the transformation of the EU energy system, the refusal of EU countries to use coal and the willingness to use renewable energy. The Commissioner stressed that the European Commission will fully support the development of transatlantic gas cooperation, including financial support of projects aimed at ensuring the transportation of US LNG to all EU countries. So, for the implementation of the recently adopted new version of the “Connecting Europe Facility projects” program (the list of infrastructure projects designed to unite Europe), the European Commission allocated EUR 8 billion.
According to Deputy Prime Minister of Romania Ana Birchall, the country that currently holds the presidency of the EU Council, the development of transatlantic energy cooperation between the EU and the United States is one of the key issues for the future formula for energy security in the European continent.
The US Secretary of Energy, Rick Perry, said that he signed two strategically important documents in Brussels, which amount the volume of US LNG exports to 112 billion cubic meters per year already in 2020. According to the Secretary, the increase in US LNG exports to the EU is the result of an agreement between the US President Donald Trump and the President of the European Commission Jean-Claude Juncker in July 2018. These agreements, according to R. Perry, laid the foundation for strategic energy cooperation between the EU and the United States.
Steven Winberg, the US Assistant Secretary for Fossil Energy, noted that over the next 12 months, the US will supply an additional 8 billion cubic meters to the EU beyond the already planned volume of 10 billion cubic meters. And by the end of 2020, the export capacity of the US will increase from 50 to 112 billion cubic meters of liquefied gas per year, and the volume of American gas exports to the EU will grow more dynamically.
Speaking about the competition of US LNG with Russian gas, Gordon Sondland, the US Ambassador to the EU, noted that currently pipeline gas from Russia and Norway is cheaper than the US LNG, but with increasing export volumes, the price of US LNG at the EU spot gas market will be naturally approaching the price of gas from the Russian Federation and Norway. In addition, according to the Ambassador, the export of LNG to the EU will weaken the economic impact of the Russian “North Stream 2” project in Europe. So, G. Sondland suggested that if the European contractors signed gas contracts with the American exporters of LNG for 20 years, they would not be willing to seek new gas contracts with Russian “Gazprom”. G. Sondland also reminded that the US did not abandon the idea of introducing sanctions against European companies that participated in the Russian “North Stream 2” project; this option is still considered by the administration of D. Trump and may become the reality, as the ambassador emphasized.
Todd Snitchler, Vice-president of “The American Petroleum Institute” (API), said that the API, together with the “International Association of Oil and Gas Producers” (IOGP) support the strategic initiative of the “EU-US Energy Council” on the development of transatlantic cooperation between the energy companies of the EU and the United States. This cooperation will contribute to the EU climate goals on reducing CO2 emissions. T. Snitchler stressed that the US Department of Energy, together with the Federal Energy Regulatory Commission (FERC), continue working on simplifying the procedures for issuing LNG exports from the United States to the EU.
The share of 600 API member companies constitutes 8% of the US economy. The enterprises of API member companies employ about 10.3 million people. In turn, IOGP members are responsible for producing 80% of the EU oil and gas and 40% of hydrocarbons in the world. IOGP members carry out operational activities in America, Europe, the Caspian region, the Middle East, Asia and Australia.
Consequently, the “EU-US Energy Council” is a key instrument for strengthening and coordinating gas cooperation between the EU and the United States. Over the past 9 months, the Energy Council has raised transatlantic gas cooperation in EU-US relations to a strategic level, has fostered close contacts between high-level officials of the EU and the US and between American and European energy companies as well.
According to the results of the Energy Forum in Brussels, the parties confirmed the agreement to increase LNG exports from the US to the EU to 18 billion cubic meters starting from this year. By the end of 2020, the US predicts an increase in US LNG export capacity to 112 billion cubic meters per year. In turn, the Federal Commission on Energy Regulation of the United States should eliminate all obstacles to the export of liquefied gas from the US to the EU.
