Sep 16, 2025 (MarketLine via COMTEX) --
Russia and its energy companies "can no longer be considered reliable energy trading partners by the EU".
The US has become a major supplier of liquified natural gas (LNG) to Europe, with imports doubling since 2021.A
This shift has been driven by several push and pull factors, most notably the EUaEUR(TM)s plan to phase out Russian gas by 2027 and secure alternative energy sources to satisfy its energy needs.AA
Add to this the USaEUR(TM) desire to develop a huge market for its abundant gas supplies aEUR" which can be easily transported globally using liquefaction and regasification techniques aEUR" and you have what appears to be a marriage made in heaven.AA
Just last week at the annual Gastech conference, US Secretary of the Interior Doug Burgum urged European decisionmakers and energy executives in the audience in this very direction: aEURoePeace is achieved around the world by selling our energy to our friends and allies who don't have to buy from our adversaries.aEURA
US LNG growth and EuropeaEUR(TM)s gas needsAAccording to GlobalData, Offshore TechnologyaEUR(TM)s parent company, the US became the worldaEUR(TM)s largest exporter of LNG in the first half of 2022 (H1 2022), with the countryaEUR(TM)s exports increasing by 12% compared with H2 2021, achieving an average of 11.2 billion cubic feet per day (bcf/d).A
In response to increasing uncertainty over the supply of gas from Russia, the US is exporting record amounts of LNG to Europe to assist EU allies in their attempts to fill gas storage facilities in time for next winter.AA
According to the US Energy Information Administration (EIA), 64% of the countryaEUR(TM)s LNG exports went to the EU and the UK during the first five months of 2022. In 2024, the US exported 11.9bcf/d of LNG, fully establishing itself as the worldaEUR(TM)s largest LNG exporter, adds the EIA.A
GlobalDataaEUR(TM)s Strategic Intelligence: Top 20 Oil & Gas Themes 2025 report states that by 2023, the EU had reduced its LNG imports from Russia to 15% of its total imports aEUR" from 45% immediately prior to the start of the Russia-Ukraine conflict.AA
However, the EU aEURoefaces a dilemma: whether to proceed with planned investments in new LNG regasification terminals or to reallocate some of those funds toward renewable energy initiatives while potentially resuming trade with RussiaaEUR, according to GlobalData.AA
Russia aside, EuropeaEUR(TM)s overall need for more gas could also be driving US imports, with Europe requiring aEURoemore gas imports as [European]Agas production steadily declineaEUR, says the GlobalData report. North America could account for up to 62% of the capacity coming online by 2025, it adds, further strengthening its position as an LNG supplier to the global market.AA
Ravindra Puranik, oil and gas analyst at GlobalData, says EuropeaEUR(TM)s strategic shift away from Russian energy exports aEURoehas resulted in key changes to the global energy supplies [and] this is anticipated to benefit the US shale oil and gas drillers, as well as LNG producers who are positioned to reap from these evolving supply chain dynamicsaEUR.A
EUaEUR(TM)s position now clearAIn June, the European Commission (EC) put forward a proposal to aEURoegradually and effectively stop the import of Russian gas and oil into the EU by the end of 2027aEUR.A
aEURoeThis will help the EU become more energy independent, improve the security of the energy supply, and boost the EUaEUR(TM)s energy independence and competitiveness,aEUR the official statement said.AA
This proposal follows the REPowerEU plan, the EUaEUR(TM)s strategy to completely remove Russian oil, gas and nuclear energy imports from EU markets, which was introduced in 2022, followed by a road map this May. It includes steps for phasing out pipeline gas and LNG, as well as measures to facilitate the complete cessation of Russian oil imports by the end of 2027.A
EU member countries will need to find alternative sources for up to 52 billion cubic metres of Russian natural gas supply within the next two years, with the package of measures including a ban on any new contracts with Russian companies.AA
The final proposal still needs to be ratified by the European Parliament before going into effect in 2026.A
The need for energy securityARussian gas imports under new contracts will be prohibited as of 1 January 2026, while imports under existing short-term contracts will be stopped by 17 June 2026. Imports under long-term contracts will cease by the end of 2027.A
The ECaEUR(TM)s proposal adds that Russia aEURoehas repeatedly threatened the EUaEUR(TM)s security of supply by unilaterally cutting gas flows to Europe, as happened in 2006, 2009 and 2014aEUR, well before the invasion of Ukraine. The first two incidents were pricing disputes, while the last one was related to RussiaaEUR(TM)s annexation of Crimea. A
The proposed regulation also makes it clear that the aEURoeRussian Federation and its energy companies can no longer be considered reliable energy trading partners by the EUaEUR.AA
RussiaaEUR(TM)s impact goes far beyond energy security of supply, impacting the whole economy, adds the Commission, noting that aEURoeenergy prices were the most important driver of inflation, which at its peak reached levels above 10% in 2022 across the EUaEUR.AA
When asked why Europe is turning away from Russian gas, a representative of the EU Agency for the Cooperation of Energy Regulators (ACER), cites how the EUaEUR(TM)s 2022 REPowerEU initiative aEURoeseeks to diversify EuropeaEUR(TM)s energy sources, boost renewable energy and improve energy efficiencyaEUR.AA
aEURoeThe EU is diversifying its imports, and this diversification is supplier based, and the US is now the biggest supplier of LNG to Europe,aEUR they add.A
Mason Hamilton, chief economist at the American Petroleum Institute, confirms to Offshore Technology that US natural gas exports to Europe aEURoehave gone up quite substantially over the past five years [and] collectively Europe is the top destination for our LNG exports, particularly Germany, [which] has turned away from Russian gasaEUR. A
Pricing and tariffsAAThe ACER representative adds that towards the end of winter 2024, European markets were aEURoepricing at a distinctive premium to Asian spot LNG markets, and new gas liquification capacity starting to produce LNG in the US, saw EU LNG imports lifted to record highsaEUR.AA
However, President Donald TrumpaEUR(TM)s threat to impose a 30% tariff on all imports from the EU is likely to produce reciprocal action, possibly impacting US LNG imports to the bloc, unless a carve out (or trade deal) can be found.A
EC President Ursula von der Leyen indicated immediately after TrumpaEUR(TM)s election win in November 2024 that the EU may consider replacing Russian LNG imports with shipments from the US, which she said is aEURoecheaper for us and brings down our energy pricesaEUR.A
According to Anne-Sophie Corbeau, global research scholar at Columbia UniversityaEUR(TM)s Centre on Global Energy Policy, Trump aEURoecould potentially fulfil the role of aEUR~LNG Marketer in ChiefaEUR(TM) to nudge EU companies to sign more US LNG contractsaEUR.AA
aEURoeHigher EU imports of US LNG are likely to materialise in 2025 for two market-driven reasons, which have nothing to do with policies or politics,aEUR adds Corbeau, in a blog from February 2025.AA
aEURoeUS LNG exports are bound to increase, as two new liquefaction plants start in 2025, and the EU will need to import more LNG to compensate for the halt of the Russia-Ukraine gas transit deal on 1 January 2025, as well to refill EU storage facilities,aEUR she concludes.AA
Meanwhile, Hamilton says that Europe is a wide-open market for LNG. US natural gas is increasingly going towards Europe as well as Asia and South America.AA
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