• On 25th March 2022, the European Commission and the United States (US) released a joint statement on European Energy Security about how the US and international partners will strive to ensure additional LNG volumes for the European Union (EU) of at least 15 bcm in 2022.
• This goal could theoretically be achievable based on US deliveries alone. We expect overall loaded US LNG output will increase in 2022 by more than 21 Bcm relative to 2021.
• US LNG is marketed on a flexible basis so if price signals are in place cargoes can be delivered anywhere in the world. In response to these dynamics, US cargoes already have been preferentially delivered to Europe in 2022 so the reference in the statement to the US government may involve discussions with different importers to divert some LNG to Europe as needed.
• By providing a stable demand market and encouraging additional long-term contracts, the statement is positive for development of pre-FID US LNG export projects. We currently expect that around 45 MMtpa of US liquefaction capacity will reach FID in 2022-23.

Posted 25 March 2022 by Gautam Sudhakar, Senior Director, Global LNG, S&P Global Commodity Insights and

Terrell Benke, Executive Director, Global LNG, S&P Global Commodity Insights

This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.