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EU’s Imports Of U.S. LNG Five Times Higher Than Russian Supply

So far this month, the European Union has received U.S. natural gas volumes five times higher than Russia’s pipeline deliveries, according to Polish outlet rp.pl, the first time in history in which American LNG has surpassed Russian gas deliveries.  

Last month, at least 30 tankers with liquefied natural gas from the United States were headed to Europe, where the gas and energy crisis pushed regional LNG prices way above the Asian LNG benchmark and 14 times higher than the U.S. Henry Hub price.

At the same time, Russian gas deliveries have been lower than usual in recent weeks. Low Russian supply and cold weather have been the two main drivers of rising gas prices in Europe in recent weeks when Russia’s deliveries via Poland and Ukraine have been lower than historical norms.

Low natural gas deliveries from Russia appear to have artificially tightened the European gas market, the International Energy Agency’s Executive Director Fatih Birol said on Thursday, adding that energy systems “face significant risks” by relying too much on one supplier for a key energy source.

“We see strong elements of ‘artificial tightness’ in European gas markets, which appears to be due to the behaviour of Russia’s state-controlled gas supplier,” Birol wrote in a LinkedIn post.

Even with normal winter weather conditions, Europe faces storage inventories dropping to a record low of below 15 billion cubic meters (bcm) by the end of March, Wood Mackenzie said on Thursday.

“Without additional Russian imports, the ability to refill depleted storage and to avoid a repeat of last year’s crisis will be limited. But Gazprom has so far been reluctant to make more gas available on the existing routes. And the start-up of Nord Stream 2 remains the big unknown as Gazprom navigates regulatory approvals. Political relations remain fragile as Russian troops amass along the Ukrainian border,” said Kateryna Filippenko, principal analyst, European gas research, at WoodMac.   

By Charles Kennedy for Oilprice.com

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  • George Doolittle on January 15 2022 said:
    Putin's Russia is in the throes of an *HORRIFIC* energy crisis *ERGO* ...
  • Leo Kobrinsky on January 14 2022 said:
    This is great news
  • Steven Conn on January 14 2022 said:
    US LNG supplies are noticeably more expensive, and EU is paying higher prices for US LNG, and and the same time to Gazprom for forcing spot prices into the traditional long-term contracts between Gazprom and European buyers. The former has reported record profits in 2021. Currently it is selling less gas but for much more money than last winter. Russia remains the leading supplier of natural gas via Gazprom and Novatek.
  • Mamdouh Salameh on January 14 2022 said:
    The entire US LNG exports to the world in 2021 amounted to 66.32 million tonnes (equivalent to 91.46 bcm of piped gas) or 10% of the entire US gas production.

    Assuming for the sake of the argument that all US LNG exports went in 2021 to the European Union (EU) where the energy crisis pushed regional LNG prices way above the Asian LNG benchmark, they will only amount to 35.83% of Russian gas exports to the EU amounting to 185.1 bcm in 2021.

    And since Russia has already fulfilled its contracted gas supplies to the EU a few months ago and is now only supplying minimum volumes to Europe, it is possible that US LNG exports to Europe might have for one month only been five times higher than Russian piped gas volumes.

    Neither American or Qatari or Australian LNG nor Norway’s and Netherlands’ gas supplies to the EU are sufficient to quench the thirst of the EU for natural gas. Only Russian reliable and plentiful gas supplies can.

    However, Russia isn’t inclined to ship any additional major supplies to the EU without the certification of Nord Stream 2 and the signing by the EU of long-term supply contracts with the Russian gas giant Gazprom. Nor will it increase supplies via Ukraine.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

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