Much talked about American LNG exports: a likely scenario for the European gas markets?

8 October 2015, 4:30 - 8 PM CET

TUSIAD Avenue des Gaulois, 13, Brussels 1040

Many of us "energy experts" are succumbing to the view that new techniques of oil and natural gas extraction in the United States have released large volumes of fossil fuels and are transforming the U.S. from an energy importer into an energy-exporting country. In terms of booming US gas production, it is envisaged that part of the stock will be consumed domestically, the part will be exported to Mexico by pipeline, whilst some volumes are expected to be exported to other countries by the sea in the form of LNG. Maritime shipments of natural gas require a double infrastructure: liquefaction plants to reduce the volume of natural gas and regasification terminals to transform the LNG back to gas and distribute it through the pipeline system.

Given that the United States has traditionally been a gas importer, the country now needs to build new liquefaction plants in order to export its gas surplus. As it currently stands (in 2015), there is one liquefaction plant on-stream in the United States. However, five new plants have received FERC authorization and several others have filed petitions with the FERC and with the Department of Energy to export LNG to non-FTA countries. By comparison, in Europe there are 21 on-stream storage and regasification terminals (including 2 terminals in Turkey), a further four are under construction and there are currently plans to build eight more.

The volume of future U.S. LNG exports to Europe will depend on a combination of factors, both political and economic. Europe needs to diversify its gas supplies and increase its infrastructure connectivity to achieve energy security. The price of American LNG is highly competitive in comparison with other LNG producers but it is generally more expensive than pipeline gas (such as gas deliveries from Russia to Germany through the Nord Stream pipeline). However, pipeline gas is not sufficient to cover all European energy demand. The next 5 years will present excellent opportunities for European companies to invest in American liquefaction plants and to enter into long-term supply contracts with US LNG exporters because the oil and gas industry in the United States will need capital and foreign buyers to build its new energy infrastructure. Will such factors ultimately and finally foresee American LNG supplies reaching European shores? Is there scope here for the establishment of a genuine trans-Atlantic LNG market? While the jury might still be out on these questions, participants in the next BREC members meeting led by Francesco Stipo will surely be enlightened by many new insights about this exciting subject. We look forward to welcoming you to this highly stimulating BREC meeting on October 8.

Program:

Welcoming remarks by Dr Bahadir Kaleagasi, Chairman, Brussels Energy Club
Setting out the debate by Dr Marat Terterov, Executive Director, Brussels Energy Club
Presentation by Dr Francesco Stipo, President Emeritus, Club of Rome, United States of America Association
Reflections and remarks by members and guests of the Brussels Energy Club, leading into Q/A session (NB: all discussions during the session will take place under the Chatham House Rule).

Speakers: