EU to Secure 75 Billion Dollars in U.S. LNG by 2028

ExxonMobil, a major U.S. energy company, anticipates that the European Union will sign long-term natural gas supply contracts with the United States. This move is part of the EU's commitment to purchase 75 billion dollars worth of American energy products by 2028. The potential contracts, which could span several decades, would involve the supply of liquefied natural gas (LNG) from the United States to European markets. This development underscores the growing importance of the U.S. as a major LNG exporter and highlights the shifting dynamics in the global energy market.

The European Union's interest in securing long-term gas supplies from the U.S. is driven by the need for energy security and the desire to transition towards cleaner energy sources. The anticipated contracts would not only benefit the U.S. energy sector but also provide Europe with a stable and reliable source of natural gas, helping to mitigate the risks associated with supply disruptions and price volatility.

Peter Clarke, senior vice president of ExxonMobil's LNG business, emphasized that Europe is now one of the most important markets for U.S. LNG exports. He noted that the key to this relationship is the establishment of a long-term supply agreement between the U.S. and Europe. ExxonMobil, with its extensive experience in long-term energy supply contracts, is well-positioned to facilitate this transition. The company's LNG is primarily sold through long-term contracts, accounting for approximately 80% of its LNG sales.

Clarke also highlighted that Europe's expanding LNG infrastructure enables it to commit to long-term orders. He believes that Europe is already preparing for this shift. ExxonMobil is also gearing up for future projects. In collaboration with Qatar Energy, the company plans to launch the Golden Pass terminal project in Texas next year. This project aims to export over 15 million tons of LNG annually, capturing a significant share of the EU market.

Following the Russia-Ukraine conflict, the EU announced its energy transition plan, further advancing its zero-emission policies. However, new trade agreements with the U.S. may delay these goals. As part of an agreement with the U.S., the EU agreed in July to purchase 75 billion dollars worth of American energy by 2028. This move aims to avoid punitive tariffs from the U.S. and reduce dependence on Russian energy.

In July, Italian energy giant Eni signed a 20-year agreement with U.S. company Venture Global to import 2 million tons of LNG annually. German company Sefe signed a 10-year agreement with ConocoPhillips and a 20-year agreement with Venture Global. These agreements reflect the growing trend of European countries securing long-term LNG supplies from the U.S.

Clarke noted that Europe's LNG imports have increased by 20% year-over-year, with approximately 55% of these imports coming from the U.S. market. In contrast, Asian imports have decreased. If the EU, under U.S. pressure, stops purchasing Russian gas, the U.S. could account for nearly three-quarters of the EU's LNG imports. This shift underscores the strategic importance of the U.S. as a reliable energy supplier for Europe.