(Reuters) - U.S. President Joe Biden announced a deal on to supply the European Union with more liquefied natural gas to help wean it off Russian supplies and to work together on accelerating a shift to renewable energy.
U.S. and EU strike LNG deal to help wean Europe off Russian gas
'ADDITIONAL' LNG
The United States has committed to work with international partners and strive to ensure the EU secures an additional 15 billion cubic metres (bcm) of LNG this year, so not all this extra volume will come from the United States.
In 2021, the European Union imported 80 bcm of LNG. It is not clear whether the additional amount means on top of this, but a U.S. senior administration official said it could be thought of as a bid to end the 15 bcm of LNG that the EU imported from Russia.
The European Commission will also work with EU countries to ensure they are able to receive an extra 50 bcm of U.S. LNG until at least 2030. The bloc bought about 22 bcm from the United States last year.
An EU official said this meant boosting infrastructure, including LNG terminals and connections between EU countries.
The transatlantic partners will also seek to reduce greenhouse gas emissions from LNG infrastructure, by using clean energy to power operations and reducing methane leakage.
REDUCING GAS DEMAND
The two sides have also agreed to cooperate on accelerating the adoption of renewable energy and reduction of energy demand.
European Commission President Ursula von der Leyen has said the EU should phase out Russian fossil fuels by 2027.
Energy savings in homes could cut demand by 15.5 bcm this year, helped by smart thermostats and heat pumps. Accelerated wind and solar power could replace 20 bcm. Together with existing Green Deal proposals, the EU aims to remove at least 155 bcm, the volume it imported from Russia in 2021, with nearly two-thirds of that achieved within a year, the Commission says.
Overall EU gas demand is about 400 bcm.
LNG ALREADY BOUND FOR EUROPE
The bloc has already stepped up efforts to secure more LNG after talks with supplier countries, resulting in record deliveries of 10 bcm of LNG in more than 120 vessels in January.
That month, U.S. deliveries rose to 4.4 bcm, around double the normal amount for January.
The EU executive has also proposed a law requiring EU underground gas storage be filled to at least 90% of capacity by October 1 each year. Inventories were low this winter.
But since global LNG plants are already producing LNG at full capacity, analysts said most of the additional gas going to Europe would have to come from exports that would have gone to other parts of the world.
That is partly happening because European gas prices have in recent months mostly been the highest in the world. However, some cargoes cannot be easily shifted as they are under contract.
