Biden's EU trip to focus on U.S. gas shipments
Boosting U.S. liquefied natural gas shipments will play a key role in emerging plans to help Europe curb reliance on Russia, U.S. and European officials said Wednesday.
Why it matters: Coming days should bring more specifics on White House plans for LNG's role in the wider response to Russia's attack on Ukraine.
- President Biden is in Brussels Thursday and Friday for meetings with G7 leaders and the NATO summit.
What they're saying: "I think you can expect that the U.S. will look for ways to increase LNG supplies, surge LNG supplies to Europe not just over the course of years, but over the course of months as well," national security adviser Jake Sullivan told reporters on Air Force 1 Wednesday.
- European Commission President Ursula von der Leyen said she and Biden will Thursday discuss "how to prioritize LNG deliveries from the United States to the European Union in the coming months."
- "We are aiming at having a commitment for additional supplies for the next two winters," she told the European Parliament Wednesday.
Zoom out: European leaders are launching multipart plans to cut reliance on Russia, which provides roughly 40% of the bloc's gas and 25% of its oil.
- They're focused on alternative fossil suppliers but also speeding deployment of renewables, hydrogen and other sources, and boosting efficiency.
Bonus: How the LNG plan could work
- "[W]e think that potential near-term measures will be largely focused on reallocation of supply to Europe, rather than actual increases in total U.S. LNG export volumes, which we think would require more time with U.S. terminals already running at capacity," Goldman Sachs analysts said.
The intrigue: Their note Thursday morning also explores how officials could seek to expand U.S. capacity at a time when the country has already become the world's largest LNG exporter and more volumes are already slated to come online.
- A U.S.-EU deal could include U.S. commitments to back "regulatory streamlining" for new export facilities and infrastructure for gas producers to get their product to them.
- "The EU might support the signing of long-term LNG contracts between the U.S. and Europe by either supporting the use of natural gas in Europe for at least 20 years, the typical [time] required for LNG project financing, or by helping European importers cover the cost of a higher liquefaction fee for a shorter contract," the note adds.