Asia for years has been seen as the primary market for U.S.- sourced liquefied natural gas (LNG), and that’s still true today as the first round of U.S. export facilities inch toward completion and operation. But an ongoing upheaval in the international LNG market—and the “destination flexibility” built into most U.S. LNG sales and purchase agreements--suggest that Europe may receive significant volumes of U.S. LNG as well. It’s also possible that U.S. exporters may become “swing suppliers” like LNG trading giant Qatargas, ready to direct LNG-laden vessels across either the Atlantic or the Pacific, depending on where the price is higher. Today, we continue our look at the fast-changing LNG market and what it means to U.S. natural gas producers and LNG exporters.
As we approach the 238th anniversary of our independence from the UK, is it possible the British Isles are about to become at least a bit dependent on us, natural gas-wise? With UK gas production falling, and with the aggressive actions of Vladimir Putin raising the specter of gas-supply interruptions from Russia to Western Europe, a case could be made that our jolly-good friends across the pond may be thinking risk-mitigation, supply diversification, and deals to buy more LNG from their former colonies. (They already plan to buy some.) But, as we discuss in today’s blog, gas prices in the UK are currently very low and the situation is, well, complicated.
