US promises Europe LNG supplies at $12/Mmbtu under long-term contracts

The United States is ready to supply Europe with liquefied natural gas (LNG) at a price of $12/Mmbtu (about $380 per 1,000 cubic meters) in the presence of long-term contracts, Toby Rice, CEO of the largest US gas company EQT, said at a conference in Abu Dhabi. About it writes Interfax.

“We can deliver gas to Europe’s doorstep for $12 per Mmbtu, and that would translate into a US gas price of $4 per Mmbtu,” he said. Rice said it would be a great deal compared to the current $20 per Mmbtu, noting that the growth potential for U.S. LNG exports is about 500 bcm. m per year compared to the current 100 billion cubic meters. m per year.

But Rice said that would require investment – in LNG terminals, plants, pipelines and drilling. “Therefore, Europe and the US need to work together to sign the appropriate long-term contracts to make this a reality,” the head of EQT stressed. According to Rice, this will contribute to energy security around the world, not just in Europe. The head of EQT also commented on the lack of pipelines in the United States to deliver gas to LNG plants: he said that the States “have gas, the question is where it will go and how it will get to the regions it needs to get to.” He added that 70% of cheap gas is located in the Appalachian region, where the company produces, so one of the supply options being considered is the construction of LNG plants on the east coast, which will eliminate the need to lay gas pipelines across the country.

He assured that the gas would be delivered through a safe route backed by both the United States government and the military.

On December 19, the EU countries agreed on a price ceiling for Russian gas in the amount of 180 euros per 1 MWh, which corresponds to $1,975 per 1,000 cubic meters. m. As part of the European gas market correction mechanism, it will enter into force on February 15, 2023. The ceiling will be activated if the gas price for TTF (this is the most liquid gas hub in the EU) exceeds the agreed level, and the spread to the LNG price in The EU will be more than 35 euros per 1 MWh. However, the ceiling will not apply to OTC transactions.