The GAS Crisis in Europe Due to the Russo-Ukrainian War

The GAS Crisis in Europe Due to the Russo-Ukrainian War

28 March 2022
  Category : News

The GAS Crisis in Europe Due to the Russo-Ukrainian War

The war between Russia and Ukraine has made it difficult for the European continent to get gas supplies. Russia has retaliated against a country it deems unfriendly to ban gas purchases from its country. Europe's hope now hinges on the territory of the United States.

The question is can the country led by Joe Biden save Europe from the gas crisis?

Launching on CNN, Monday (28/3/2022), North Atlantic shipping lanes increased this year, as the US natural gas shipping fleet headed for Europe. The United States will work with other suppliers to ship an additional 15 billion cubic meters of liquefied natural gas (LNG) to the European Union by 2022.

Energy experts say America's LNG export terminal is getting very hot this year. "An increase of 15 billion cubic meters from the 2021 level should be achievable, especially if we continue to see the strong flows we have seen so far this year," said commodity strategists at Dutch bank ING.

Even so, an increase of 15 billion cubic meters will not replace European gas imports from Russia which will total around 155 billion cubic meters in 2021. But this is a start.

"15 billion cubic meters of LNG is a huge number. This equates to about one-sixth of Germany's annual gas demand," said Alex Froley, LNG analyst at Independent Commodity Intelligence Services.

But keep in mind that LNG is not delivered by pipeline. The gas is cooled to a liquid state and loaded onto ships. Sending an additional 15 billion cubic meters to Europe means an additional 150 shiploads across the Atlantic.

It is remarkable that the United States is in a position to help Europe. The United States only shipped its first LNG cargo from the lower 48 states in 2016, and has risen to become the world's top exporter in just six years as the shale gas revolution boosts domestic production.

America exported more LNG than rival producers such as Qatar and Australia for the first time in December. The US will be the world's largest exporter through 2022 overall, according to the US Energy Information Administration.

"The United States has abundant gas supplies, a broadly favorable political and regulatory environment, and an experienced and capable construction industry, making it one of the most attractive locations to develop new export capacity," said Ed Crooks of Woods Mackenzie earlier this year.

The European Union alone imported more than 12 billion cubic meters of LNG from America in the first quarter of this year. That's up from 4 billion cubic meters in the same period in 2021, according to Froley.

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