EU and US agree gas supply deal to end Russian dependency

Just a tiny fraction of European gas comes in the form of LNG.

The European Union and the US announced an agreement to try and boost the supply of liquefied natural gas (LNG) to European countries by the end of 2022 with at least 15 billion cubic meters.

The aim is to work with international partners to help the continent wean itself off Russian fuel imports. Under the agreement, EU member states will work to ensure demand for 50 billion cubic meters of US liquefied natural gas until at least 2030.

Europe imports most of its Russian gas via pipelines, with just a tiny fraction coming in the form of LNG. Russia ships about 150 billion cubic meters of gas to Europe via pipelines, with just about 14 to 18 billion coming in the form of LNG. That means any disruptions from Russia would hard to cope with.

“We’re coming together to reduce Europe’s dependence on Russian energy,” US President Joe Biden said at a joint press conference with European Commission President Ursula von der Leyen, who added that 15 billion cubic meters this year “is a big step in that direction.”

The issue is critical as Russia is the EU’s biggest natural gas supplier, accounting for more than 40% of imports. 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.

Reacting to the news, Fianna Fáil MEP Billy Kelleher said the EU-US deal means the Government should work to progress the planned LNG terminal on the Shannon estuary in Ballylongford, Co Kerry. A planning decision on the project by An Bord Pleanála has been put back to September. Me Kelleher said the facility is in a prime location to take in this LNG and disseminate into the EU network.

“For this to happen, the Irish Government needs to get off their hands and stop leaving the decisions solely up to the planning authorities," he said. “We are in an energy security crisis. If it is a choice between LNG arriving into the EU via North Kerry or Putin having the EU over a barrel due to our dependence on Russian gas, there is only one right answer."

The aspirational pact is light on detail and the US did not immediately say which partners it would source new shipments from or by when — suggesting that final agreements aren’t yet in place with suppliers.

The primary goals of a joint task force -- which will be chaired by a representative each from the White House and the European Commission -- will be to diversity LNG supplies in line with efforts to combat climate change and to cut demand for natural gas.

The additional imports from the US will take time to start, with Europe constrained by the current regasification capacity, number of terminals and interconnectors, according to an EU official.

Additional reporting Bloomberg