This is the story of an LNG carrier that left Freeport (Texas) for Asia on March 21, which abruptly turned around after twelve days at sea and recrossed the Panama Canal to head for Gibraltar, leaving pay 1 million dollars (925,000 euros) round trip toll. Never mind, says the Bloomberg agency: the “high premiums” offered on the Old Continent convinced the company BP, the charterer of the British Listener, to deliver its precious cargo of liquefied natural gas (LNG) to a European port. These unusual changes of destination symbolize the current upheaval on the world gas market.
Europe will buy more and more LNG, especially from the United States. The European Union (EU) faces the enormous challenge of replacing 155 billion m3 of Russian gas per year, i.e. 40% of its consumption, more for Germany and certain Eastern European countries. For now, gas from Siberia is still flowing: it brings in 400 million dollars a day to Russia. Moscow even increased its deliveries by 40% between January and March – including through the Brotherhood gas pipeline crossing Ukraine. For how much longer ?
The EU indeed unveiled, on March 8, the REPowerEU plan intended to reduce its supplies by two thirds before the end of 2022, to finally do without it in 2027. LNG is one of the main components. “Since the fall [2021], Europe significantly increased its LNG purchases, with a record in the first quarter [2022]notes Armelle Lecarpentier, chief economist of the international association Cedigaz. Prices are higher in Europe than in Asia, and the United States has redirected its flows. » With all the more ease, according to her, that ” the flexibility of American contracts makes it possible to deliver to the most attractive markets”.
USA winners
Two-thirds of American exports have gone to the Old Continent in recent months; in the first quarter, LNG became its main source of gas, ahead of Russian deliveries by gas pipeline. For the time being, 70% of liquefied gas goes to Asia (China, Japan, South Korea, etc.). But the share of LNG will increase in Europe in view of the strong growth in its demand, indicates Christopher Kuplent, an analyst at Bank of America, even if he judges that replacing even a third of Russian gas in one year will be ” very difficult “.
Having become the world’s largest exporter, five years after delivering its first shipment, the United States will play an important role and will largely benefit from the situation. For the time being, the Americans have cheap shale gas from Texas and a margin of additional liquefaction capacity that can supply Europe (about 20 billion m3). President Joe Biden has staged this prospect, presenting himself as the savior of Europe with 50 billion m3 per year promised to the EU, without having any power over American producers. The additional LNG delivered to Europeans is only due to the price they are willing to pay.
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