US and EU announce deal to boost LNG supplies for Europe

US and EU announce deal to boost LNG supplies for Europe
The United States will supply more liquid natural gas (LNG) to the European Union to help it reduce its reliance on gas supplies from Russia, President Joe Biden has announced.

“Today we’ve agreed on a joint game plan toward that goal while accelerating our progress toward a secure clean energy future,” Mr Biden said in a statement.

“This initiative focuses on two core issues, one helping Europe to reduce its dependency on Russian gas as quickly as possible and secondly, reducing Europe’s demand for gas overall,” he said.

The agreement will see the US work to deliver at least 15 billion cubic metres of LNG to EU states by the end of 2022.

Under the agreement, EU member states will work to ensure demand for 50 billion cubic meters of US liquefied natural gas until at least 2030. LNG imports from Russia stood at around 14 billion to 18 billion cubic meters annually in the past years.

However, there are no LNG terminals in Ireland to receive shipped gas, and the Government has frozen plans to build any. Planning permission for a terminal on the Shannon Estuary backed by US firm New Fortress Energy has been delayed.

Ireland’s dependence on oil and gas leaves the country “acutely exposed” to Russia’s war in Ukraine, even if Moscow is not supplying our energy, the National Competitiveness and Productivity Council’s (NCPC) said in an energy bulletin this week.

It also said that an LNG terminal could ease supply concerns if its construction did not cost more than transporting gas through Ireland’s two pipelines connecting to Scotland.

President Biden and European Commission President Ursula von der Leyen announced the pact – which includes the formation of a joint task force – ahead of an appearance together on Friday in Brussels following Mr Biden’s meetings on Thursday with NATO, the Group of Seven and EU leaders.

In Berlin, Germany unveiled its own plan to dramatically reduce Russian fossil fuel imports and make the country almost completely independent of Russian gas by the middle of 2024.

The country is aiming to halve imports of Russian oil by mid-year while rapidly reducing its dependency on the nation’s gas and coal, Der Spiegel magazine reported, citing an economy ministry paper. Russian gas could account for as little as 30 per cent of imports by the end of the year, down from more than half currently, while the aim is to reduce oil imports almost to nothing by then, the magazine quoted the paper as saying. Purchases of Russian coal should end by the early summer.

Currently, European buyers are competing with Asian countries for the world’s limited supply of LNG cargoes.

The issue is critical as Russia is the EU’s biggest natural gas supplier, accounting for more than 40 per cent of imports. The EU also relies on the country for the biggest share of its coal and oil imports, and has struggled to shift its energy policy away from Moscow.

The primary goals of the joint task force – which will be chaired by a representative each from the White House and the European Commission – will be to diversify LNG supplies in line with efforts to combat climate change and to cut demand for natural gas.

It will “work to ensure energy security for Ukraine and the EU in preparation for next winter and the following one while supporting the EU’s goal to end its dependence on Russian fossil fuels,” according to a white House fact sheet.

The 27-nation bloc is aiming to replace this year nearly two-thirds of its total gas imports from Russia, which amounted to 155 billion cubic meters last year.