New U.S.-Greece LNG Deal Strengthens Europe’s Energy Security

Mike Sabel, CEO of Venture Global, emphasized the significance of this deal, stating, “This move further integrates our business across the LNG supply chain, including production, shipping, and regasification. As a key entry point for LNG into Central and Eastern Europe, this infrastructure will be crucial for diversifying energy sources and ensuring a secure supply. Venture Global is proud to support these efforts as a strategic partner with volumes from both Plaquemines LNG and the upcoming CP2 LNG.”

Renewable Energy and Changing Gas Supply Dynamics

Norway and the U.S. have overtaken Russia as Europe’s primary gas suppliers. In the previous year, Norway provided 87.8 billion cubic meters (bcm) of gas, accounting for 30.3% of total imports, while the U.S. supplied 56.2 bcm, or 19.4%. Notably, the U.S. is now the largest LNG supplier to Europe, contributing nearly half of the continent’s total LNG imports for the third consecutive year.

The shift in supply dynamics is striking: U.S. LNG accounted for 27% of total European imports in 2021, climbing to 44% in 2022 and 48% in 2023. This surge can largely be attributed to the ongoing conflict in Ukraine, which has heightened Europe’s reliance on U.S. gas. Meanwhile, Europe is ramping up its capacity to receive LNG, with regasification capacity projected to reach 29.3 billion cubic feet per day (Bcf/d) in 2024—an increase of 33% from 2021. Germany is leading this expansion, having added significant regasification capacity in 2023 and planning further increases in 2024.

On the global stage, the U.S. shipped a record 56.9 million metric tons of LNG in the first eight months of 2024, surpassing both Australia and Qatar. This marks the second consecutive year that U.S. exporters have led global rankings.

However, the current year has seen a decline in U.S. LNG exports to Europe, with shipments from January to August dropping by 22% year-on-year. This slowdown is largely due to a significant increase in renewable energy generation in Europe. Solar and wind power’s share of the electricity mix rose from around 16.4% in 2022 to 20.5% in 2024, while fossil fuel generation fell from 44.6% to 36.6%.

Current Market Trends

Natural gas futures in Europe have recently lost momentum, dipping below €35 per megawatt-hour—its lowest level in seven weeks—thanks to milder weather forecasts and healthy gas inventories. Europe’s gas stocks are currently 0.1 bcm higher than last year and 8.6 bcm above the five-year average, with storage utilization at 93.4%.

In contrast, U.S. gas producers are facing challenges, with average LNG export prices dropping by 25% year-on-year in the first half of 2024. This decline has resulted in a revenue drop of $4 billion compared to the same period in 2023, marking the lowest revenue total since early 2021 and a significant fall from the peak earnings seen in late 2022.

Source: GCT–Bill Kouras