Buyers from across Europe are turning to long-term supply deals with U.S. liquefied natural gas exporters to mitigate an energy crisis.
The trend shows how countries are moving past earlier wariness to enter long-term gas agreements due to their commitment to achieving net-zero greenhouse gas emissions.The war in Ukraine fractured the well-established trade relationship between the European Union and Russia, which had been its top natural gas supplier and was expected to remain so as long as the continent needed the fuel.
At least five long-term supply and purchase agreements have been announced between U.S. LNG suppliers and European buyers since November. The company announced long-term agreements with British multinational Ineos, French energy company ENGIE, and Germany's RWE Supply & Trading covering 20 years, 15 years, and 15 years respectively.
"You can't finance these without 15 to 20-year deals," Hutchison told the Washington Examiner."We're seeing more 15-year deals, but it's clear that it's the 15-20 year deals that are the key to unlocking financing." Biden and European governments have been criticized widely by environmentalists and some lawmakers, who consider the policies as transgressing their commitments to mitigating climate change.
"We're not going to see any new [U.S.] LNG this year — not exactly the news that the rest of the world is looking for, but it is the reality of how markets work in LNG," Reidl said.
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