Though the European Commission financially supports infrastructure projects that are deemed to be of common interest, policy makers in Brussels have limited powers to push for more U.S. LNG imports. With energy markets liberalised, the Commission has no political influence on energy imports, as the purchasing is done by private companies.
Keen to diversify Europe’s energy sources and reduce dependence on Russian pipeline gas, the Commission has been granting financial support to developers of LNG import terminals, although projects need to have sufficient private sector funds.
Four LNG regas projects with a combined capacity of 9 Mtpa are currently under development in the EUE, and are listed as priority common interest projects: the 2 Mtpa Krk project in Croatia; the 4 Mtpa terminal project in Alexandroupolis in Greece; the 0.5 Mtpa terminal in Gothenburg, Sweden; and a 2.5 Mtpa expansion of the Polish LNG terminal at Swinoujscie.
Energy Aspects cautions, however, that project development is unlikely to accelerate as the utilisation of existing European regas terminals remains low, having been around 20% in 2017. “It is simply the case that sufficient regas capacity is not an issue for the EU.”
“It is also the case that Europe-based LNG buyers are already interested in buying US LNG, having signed up for over 27 Mtpa of supply from the US projects currently completed or under construction,” analysts said.
However, as global gas markets remain tight the price spread between Asia’s JKM hub and the Dutch Title Transfer Facility (TTF), the reference price for European gas, is likely to remain wide enough.