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The EU will say goodbye to gas supplies from Moscow by 2027, thanks to storage, joint purchases and an internal network.
Already the eyes are on US supplies. But what exactly does the agreement between Biden and von der Leyen provide, and how much gas can the United States export?
What is liquefied natural gas?
It is natural gas that is cooled in the liquid state to about 126 degrees below zero, to facilitate its storage or shipping. The volume of liquefied natural gas is approximately 600 times lower than that transported through the pipeline. Liquefaction makes it possible to transport gas to places that are not accessible by pipelines. The gas extracted from the fields is taken to a liquefaction plant located on the coast, liquefied and transported to a regasification plant. There are currently around 650 liquefied natural gas carriers in operation worldwide.
How much gas does Europe consume and how much does it come from Russia?
Although gas consumption in Europe has fallen by about 10% over the last twenty years, continental production has declined from 290 to 200 billion cubic meters per year due to the depletion of North Sea and North Sea reserves. As a result, the use of Russian gas has increased. In 2021, 155 billion cubic meters of Russian gas arrived in the EU, equivalent to 45% of total gas imports. The EU aims to eliminate at least 50 billion cubic meters of Russian origin in the shortest possible time. Russian gas reaches Europe via pipelines.
Who are the main importers of Russian gas?
In terms of import volumes, the country most exposed to Russia is Germany, followed by Italy, the Netherlands, Poland and France.
How much gas can the United States export?
Thanks to the “shale gas” technological revolution, the United States is the largest producer of gas in the world with approximately one trillion cubic meters per year, followed by Russia and Iran. In 2021 they exported 188 billion cubic meters of gas, of which 87 by land to Canada and Mexico and 101 in the form of liquefied natural gas. The US plans are extremely ambitious: by the end of 2022 the country will become the largest exporter in the world (at 120 billion cubic meters) surpassing Australia and Qatar. It is estimated that in 2024 they will have an export capacity of up to 170 billion cubic meters.
What does the agreement between Biden and von der Leyen provide for?
Under the agreement between US President Joe Biden and EU Commission President Ursula von der Leyen, at least an additional 15 billion cubic meters of liquefied natural gas will arrive from the United States in Europe this year. The United States will also guarantee supplies to meet the demand for natural gas of at least 50 billion cubic meters per year by 2030.
How much will US gas cost us?
This is a crucial issue. The US-EU agreement says that the prices of gas supplies to the EU will have to reflect the long-term market fundamentals, the stability between supply and demand, and that this increase will be in line with the common emission targets. According to the price formula should take into account stabilizing factors. Henry Hub is the reference platform of American gas, which has historically lower prices than those of the Dutch platform. Long-term contracts always have lower prices than spot contracts. According to the statement, the price should be “affordable”.
Adapted from Corriere.
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