EU, US commit to working to keep high level of US LNG exports to EU in 2023

The EU and US have committed to working to keep up a high level of US LNG supplies into Europe in 2023 as part of their alliance on energy security, they said Nov. 7.

In a joint statement following a meeting of the EU-US taskforce on energy security in Washington on Nov. 3, the two sides also said they would look to ensure gas supply at prices that reflected market fundamentals.

The EU and US in March agreed a joint declaration on energy security that laid out plans for the delivery of an additional 15 Bcm of US LNG to the EU in 2022 compared with 2021, and a further 50 Bcm/year in the following years.

As part of the pact, a taskforce was also established to meet regularly to discuss progress.

"This year alone, in January through October, approximately 48 Bcm of LNG was exported from the US to the EU, which is 26 Bcm more than for the full year of 2021," they said in the joint statement.

"Building on this trend, the participants committed to work on keeping a high level of LNG supplies to Europe in 2023 of an additional approximately 50 Bcm as compared to 2021."

The parties also discussed how the taskforce could contribute to ensuring security of supply and storage filling in 2023 "at prices reflecting economic fundamentals and our shared push for energy market stability."

"This effort will be further supported with the establishment of the EU energy platform as an instrument for demand aggregation and joint purchase of gas," they said.

The European Commission wants member states to pool some storage demand as part of plans to jointly procure gas from trusted supply partners at affordable prices.

Russian 'weapon'

The EU has seen its gas imports from Russia slashed through 2022 as Moscow cut deliveries via Nord Stream and the Yamal-Europe pipeline, as well as reducing supplies via Ukraine.

European gas prices hit record highs in late August due largely to the lower Russian exports, though healthy gas storage levels and demand reductions have seen prices weaken in recent weeks.

Platts, part of S&P Global Commodity Insights, assessed the benchmark Dutch TTF month-ahead price at Eur114.85/MWh on Nov. 4, well down on the record of Eur319.98/MWh on Aug. 26.

In their statement, the EU and US said they would also continue to support countries in eastern Europe, such as Moldova, that face "acute impacts from Russia's actions to employ energy as a weapon."

Gazprom has threatened to cut gas supplies to Moldova a number of times in recent months over late payments and historical debt.

The EU and US also said the EU's resolve to diversify its gas supplies and reduce overall gas use was "unequivocal".

"Close partnership between the EU and the US on energy matters offers opportunities for both sides to accelerate the clean energy transition and, also curtails Russia's energy revenues, which are used to fund the unprovoked and unjustified war," they said.

The taskforce also discussed how the EU-US LNG trade should aim to achieve significant reductions in flaring, venting, and leakage of methane "to the fullest extent practicable."

"Both sides plan to pursue initiatives to reduce flaring, venting, and leakage including through innovative purchasing frameworks to incentivize the capture of this gas to bring to market," they said.

These include the EU's proposed "you collect, we buy" approach.