Phil Rosen
Wed, August 3, 2022
Aapsky/Getty Images
The US is now sending more gas to Europe by ship than Russia is sending by pipeline, per the Wall Street Journal.
In July, US liquefied natural gas accounted for 13% of total supply to Europe, compared to 10% from Russian pipelines.
Conflict in Ukraine shows no signs of easing, and the US has stepped in to help the EU amid a historic energy crisis.
Russia's invasion of Ukraine has redirected energy deliveries around the world, and one result has been that the US is now sending more gas to Europe by boat than Russia is by pipeline, ICIS data shows, according to the Wall Street Journal.
Since 1967, Gazprom's pipelines in West Siberia and the Yamal peninsula have delivered huge amounts of gas to Europe but that precedent has been turned on its head in recent months.
In July, US liquefied natural gas accounted for 13% of total supply to Europe, compared to 10% from Russian pipelines. Pipelines from Norway were the top source of gas to the continent, while other sources include North African pipelines and Qatar liquefied natural gas supplies, as well as domestic production.
Over the last six months, European wholesale gas prices have tripled as Moscow continues to tighten natural gas flows. State-run Gazprom, citing technical issues, cut Nord Stream 1 natural gas deliveries to Germany to 20% down from 40%.
The European Commission said that 12 member states are enduring severely reduced flows and a handful of nations have been entirely cut off. Just this week, Gazprom halted natural gas deliveries to Latvia.
Now, the continent has turned to importing more Russian diesel amid its struggle to wean off other energy supplies from the country. Imports of Russian diesel are up 23% from a year ago, Vortexa data shows.
With conflict in Ukraine showing no signs of easing and the EU facing a historical energy crisis, the US has stepped in as an emergency energy supplier.
Natural Gas Surges With US LNG Export Terminal Set for Fast Restart
Gerson Freitas Jr., Sergio Chapa and Diana Li
Wed, August 3, 2022
(Bloomberg) -- US natural gas prices surged after a key export terminal in Texas reached an agreement with regulators to restart as soon as October after an explosion.
Freeport LNG, which was shut down in June after a blast, has entered into an agreement with the Pipeline and Hazardous Materials Safety Administration to resume operations in early October at almost full capacity, the operator said in a emailed statement Wednesday. That would boost demand for natural gas by nearly 2 billion cubic feet a day, equivalent to roughly 2% of domestic output.
While Freeport had already indicated that it planned to resume operations in October, the news surprised traders who expected a more gradual restart after PHMSA, as the regulator is known, demanded a series of corrective actions from Freeport. The Texas plant must provide weekly updates to the agency and file a root cause analysis report within 90 days, according to order.
“The partial restart is bigger than previously expected,” said Brayton Tom, a senior risk manager for energy at StoneX Group Inc.
The restart of Freeport LNG is poised to increase the strain on US inventories of the heating and power-generation fuel ahead of winter. Concern about tightly supply has triggered stomach-churning volatility and led prices to more than double this year. Gas held in salt caverns and depleted aquifers is about 12% below levels typically seen for this time of the year, and booming domestic demand this summer has limited suppliers’ ability to add gas to storage.
“We previously had Freeport only returning to partial service in November, and the extra feedgas demand that is likely puts longer odds on the bearish side of the market,” said David Seduski, an analyst at Energy Aspects Ltd.
The restart of Freeport LNG should come as a relief for Europe, which desperately needs extra US gas. Reduced imports from Russia amid the war in Ukraine have sparked fears of a supply crunch this winter, sending prices in the region skyrocketing.
Gas for August delivery on the New York Mercantile Exchange settled up 7.3% at $8.266 per million British thermal units after earlier rising as much as 10%.
Gerson Freitas Jr., Sergio Chapa and Diana Li
Wed, August 3, 2022
(Bloomberg) -- US natural gas prices surged after a key export terminal in Texas reached an agreement with regulators to restart as soon as October after an explosion.
Freeport LNG, which was shut down in June after a blast, has entered into an agreement with the Pipeline and Hazardous Materials Safety Administration to resume operations in early October at almost full capacity, the operator said in a emailed statement Wednesday. That would boost demand for natural gas by nearly 2 billion cubic feet a day, equivalent to roughly 2% of domestic output.
While Freeport had already indicated that it planned to resume operations in October, the news surprised traders who expected a more gradual restart after PHMSA, as the regulator is known, demanded a series of corrective actions from Freeport. The Texas plant must provide weekly updates to the agency and file a root cause analysis report within 90 days, according to order.
“The partial restart is bigger than previously expected,” said Brayton Tom, a senior risk manager for energy at StoneX Group Inc.
The restart of Freeport LNG is poised to increase the strain on US inventories of the heating and power-generation fuel ahead of winter. Concern about tightly supply has triggered stomach-churning volatility and led prices to more than double this year. Gas held in salt caverns and depleted aquifers is about 12% below levels typically seen for this time of the year, and booming domestic demand this summer has limited suppliers’ ability to add gas to storage.
“We previously had Freeport only returning to partial service in November, and the extra feedgas demand that is likely puts longer odds on the bearish side of the market,” said David Seduski, an analyst at Energy Aspects Ltd.
The restart of Freeport LNG should come as a relief for Europe, which desperately needs extra US gas. Reduced imports from Russia amid the war in Ukraine have sparked fears of a supply crunch this winter, sending prices in the region skyrocketing.
Gas for August delivery on the New York Mercantile Exchange settled up 7.3% at $8.266 per million British thermal units after earlier rising as much as 10%.
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