American Oil and Gas Reporter - October 2022 - 38

U.S. LNG Can Fill European Shortfalls
Rystad Energy Study:
WASHINGTON-As global natural gas
markets continue to tighten and Europe
braces for a challenging winter, the American
Petroleum Institute and the International
Association of Oil and Gas Producers have
released a new analysis of Europe's natural
gas market and are highlighting the immense
potential of U.S. liquefied natural gas to
help Europe strengthen its energy security.
Conducted by Rystad Energy, the study
concludes that, despite the challenges of
the short-term outlook, new long-term supplies
from abundant and affordable resources
can fully replace Russian natural gas and
rebalance the European market.
" As Russia holds European energy
supplies hostage, this study shows how
critical American natural gas will be to
lasting global energy security, " reports
API Vice President of Natural Gas Markets
Dustin Meyer. " To harness the power of
U.S. LNG, we need smart and consistent
· Without Russian pipeline gas, Europe's demand
for LNG is projected to increase 150% from 20212040
as overall natural gas demand declines more
slowly than domestic production and non-Russian pipeline
imports.
· LNG is projected to meet approximately 50%
of Europe's natural gas demand through 2030. After
2030, LNG will meet an even greater share, reaching
about 75% of demand by 2040.
· Growth in European LNG demand will be more
than double the 50 bcm (48 Bcf/d) specified in the
March joint agreement between the Biden
administration and the European Union. While U.S.
LNG is already flowing to Europe at record levels,
significantly more will be required to fully
rebalance European gas markets.
Global LNG production by region
bcm
1,000
900
800
700
600
500
400
300
200
100
Incremental production required for additional European demand
Europe
America S
Asia
Russia
Africa
Australia
Middle East
America N
policy support here at home, including
strengthening domestic pipeline networks
and energy export facilities, that will
ensure both American consumers and
global allies have access to the reliable
energy that powers our modern world. "
" The European Union needs to secure
alternative supplies now if it wants to fully
phase out Russian gas imports by 2027.
That means acting immediately to support
domestic production, secure long-term LNG
Global LNG production by availability/types of contracting
bcm
1,000
900
800
700
600
500
400
300
200
100
Available for future long-term contracts**
US LNG FOB*
Existing long-term point-to-point contracts (unavailable for trade)
Short-term contracts are
about 30% of globally
sold LNG in 2021
THE DECISIONS EUROPEAN AND U.S. POLICYMAKERS MAKE TODAY WILL IMPACT EUROPE'S ABILITY TO REBALANCE
ITS NATURAL GAS MARKET WITH DEPENDABLE, AFFORDABLE AND SUSTAINABLE ENERGY IN THE YEARS TO COME.
· To meet the shared energy security commitments
of the United States and the European Union, the United
States will need to expand its LNG export capacity
and the European Union will need expand its import
capacity even further over the next several years.
· Timeliness and transparency across the
permitting and approval process for the full natural
gas and LNG value chain is critical to helping the
United States meet its commitments and strengthen
global energy security.
· The flexibility of LNG and natural gas infrastructure
can help ensure EU energy security and
support climate goals.
· Long-term new capacity expansion is required
and can act as an insurance policy against future
energy supply crises.
· LNG and natural gas infrastructure is hydrogen-adaptable
and biomethane-ready. This makes it a
key enabler of the EU's energy transition and gas
supply diversification goals.
Infrastructure status on European regas capacity
bcm
400
350
300
250
200
150
100
50
Operational
Planned
FID taken
Under construction
200
150
North and Central Europe
100
50
Iberia
European regas capacity split by geography
bcm
400
350
300
250
Southeast Europe
United Kingdom
Italy
The fact sheet above highlights a few of the findings in the analysis
" Rebalancing Europe's Gas Supply: Opportunities in a New
Era " that Rystad Energy performed for the American Petroleum Institute
and the International Association of Oil & Gas Producers.
38 THE AMERICAN OIL & GAS REPORTER
The study was released in late September and includes dozens of
pages of statistical analysis expressed in graphs and charts and
maps that demonstrate how U.S. LNG can help Europe meet its
natural gas demand.
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American Oil and Gas Reporter - October 2022

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