The U.S. and European Union (EU) have reached a new deal to lessen reliance on natural gas from Russia.
Under the agreement, Europe will get at least 15 billion cubic meters of additional liquified natural gas (LNG) supplies by the end of the year, though it’s not clear exactly where it will come from. European states will also work to ensure that facilities can take in up to 50 billion cubic meters of American fuel until at least 2030.
The aim of the deal is to work with international partners to help the continent wean itself off Russian gas, which accounts for about 40% of Europe’s needs.
Europe is trying to diversify its energy sources in a bid to starve Russia of the revenues it needs to fund its war in Ukraine. But that’s a big task. Russia ships about 150 billion cubic meters of gas to Europe via pipelines every year, and another 14 billion to 18 billion cubic meters of LNG.
Details of the 15 billion cubic meters of LNG are currently vague. Contracts have not been signed for the full volume, U.S. National Security Advisor Jake Sullivan said. It will come from “a variety of sources,” and not just the U.S., he said.
The issue is critical as Russia is the EU’s biggest gas supplier. The EU also relies on the country for the biggest share of its coal and oil imports and has struggled to shift its energy policy away from Moscow.
The details of how the plan works is now in the hands of energy companies, with American LNG shippers and German buyers set to meet next week in Berlin to hash out the details.
The U.S. has already been providing more LNG to Europe, with shipments doubling to record 4.4 billion cubic meters in January and a similar level in February. Supplying another 15 billion cubic meters could be feasible as long as Europe continues to pay a premium compared to Asian buyers.
A significant boost to global LNG supplies will only come in 2025 and beyond, when new projects are scheduled to come online.
