The United States is preparing to send large shipments of LNG to Europe
Oil fell about $1 after the The Washington Post reported that the Biden administration and the European Union are expected to announce a major initiative to direct liquefied natural gas shipments to Europe during the US president’s visit to Brussels this week. The announcement would come as European officials have called on the United States to do more to help it reduce its dependence on Russian energy sources.
The announcement, part of a ‘dramatic effort’ to deprive Russia of leverage as it continues to beat Ukraine, would mark an unusual move to reorganize the global energy flow – a change that could impact long after the war ended. It comes as European officials have asked the United States to do more to help it reduce its dependence on Russia for oil and natural gas.
Biden’s national security adviser, Jake Sullivan, said a deal would be announced as early as Friday. According to an American official, it is intended to ensure Europe’s supply of American natural gas and hydrogen.
Sullivan told reporters aboard Air Force One on Wednesday:
A major priority for the President and his European allies is to reduce Europe’s dependence on Russian gas, period, and the practical roadmap for achieving this – what steps need to be taken, what United States can provide what Europe must do itself.
Addressing EU lawmakers in Brussels on Wednesday, European Commission President Ursula von der Leyen said all EU members “can help reduce our dependence on Russian gas”.
Energy policy is also a security policy.
With REPowerEU, we have paved the way.
Tomorrow I will discuss with @POTUS how to prioritize LNG deliveries from ???????? for ???????? In the coming months.
We are aiming to have a commitment for additional supplies for the next two winters. pic.twitter.com/xK8DnWHPxT
— Ursula von der Leyen (@vonderleyen) March 23, 2022
Of course, sending an LNG flotilla to Europe is nothing new and this plan has been around for some time – a well-known catch here is that Germany has no LNG terminals to ship shipments, and therefore it will take at least 1-2 years to build the necessary facilities at a cost of several billions. This is probably also why, after jumping more than 20% yesterday following the announcement that Putin will only accept rubles for Russian gas purchases, European gas prices barely budged after the WaPo report.
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