U.S. liquefied natural gas exports up by 272% as EU and U.S. host High-Level Business-to-Business Energy Forum.
In their Joint Statement of 25 July 2018 in Washington D.C., President Juncker and President Trump agreed to strengthen EU-U.S. strategic cooperation with respect to energy. They came in particular to an understanding on the benefits of expanded exports of U.S. liquefied natural gas (LNG) to the EU gas market.
Since the first cargo in April 2016 U.S. LNG exports to the EU have been increasing substantially and have seen a steep rise after President Trump and President Juncker’s meeting in July 2018 increasing by 272%. As a result, March 2019 recorded the highest volume ever of EU-U.S. trade in LNG with more than 1.4 billion cubic metres.
Today, top energy business executives from both sides of the Atlantic meet in Brussels to discuss further ways to enhance LNG trade, the role that competitively-priced U.S.-LNG can play on the EU market and the growing opportunities for using LNG in the transport sector. This High-Level Energy Forum, opened by EU Commissioner for Climate Action and Energy Miguel Arias Cañete and U.S. Secretary of Energy Rick Perry, gives American and European businesses the opportunity to chart further actions to fully harvest commercial opportunities in the LNG trade. These will range from new infrastructure for upstream development, liquefaction and re-gasification to pipeline network distribution as well as new business models and financial instruments in a changing market. It also provides U.S. and European decision-makers from companies in the LNG sector with match-making and deal-making opportunities.
The gathering, which is a clear signal of the strengthened of EU-U.S. cooperation in the field of energy, provided a further occasion for EU Commissioner Miguel Arias Cañete to meet with the U.S. Secretary of Energy Rick Perry and discuss broader aspects of EU-US energy relations.
Speaking after the meeting, Commissioner for Energy and Climate Miguel Arias Cañete said: “Energy security is one of the key success stories of our transatlantic cooperation and one where we both have a keen mutual interest. It is therefore our common objective to further deepen our energy cooperation. Natural gas will remain an important component of the EU’s energy mix in the near future as we move towards cleaner sources of energy. Given our heavy dependence on imports, U.S. liquefied natural gas, if priced competitively, could play an increasing and strategic role in EU gas supply.”
U.S. Secretary of Energy Rick Perry said: “Today’s discussion follows on last July’s joint statement by President Trump and President Juncker on strengthening our strategic energy partnership. We share a history of transatlantic cooperation, through good times and bad, and together we promote our heritage of freedom. The strength of this relationship can particularly be seen in energy. When it comes to natural gas, we each have what the other needs to derive tremendous mutual benefit from advancing our energy relationship.”
Increased imports of U.S. LNG contribute to the EU’s goal of diversification of energy supply. Competitive, fluid and stable, the EU gas market is the second biggest single gas market in the world after the U.S.
European gas imports are projected to increase in the years to come as its domestic production is decreasing, while demand is projected to remain at a comparable level as gas has been identified as an important transition fuel in the EU’s efforts to decarbonise its economy.
Development of liquefied natural gas capacities in the EU
The EU has well-developed liquefied natural gas import capacities, with about 150 billion cubic meters currently spare. At the same time, given their strategic importance for diversification and supply security, current capacities are being expanded and new capacities are being developed. Most recent developments include:
The signature of a grant agreement between the Polish government and the Polskie LNG company for the extension of the Liquefied Natural Gas (LNG) terminal in Świnoujście, in north-western Poland on the Baltic Sea coast, on 24 April. The EU invested almost €128 million from the European Regional Development Fund in extending this terminal, this comes on top of €224 million already invested under the previous funding period.
The final investment decision of the LNG terminal on the island of Krk in Croatia in January 2019. The EU has contributed with a total of €124 million(including €108 million for the terminal and €16 million for the evacuation pipeline).
The EU is also supporting capacity developments in Greece, Spain, Ireland, Sweden and Cyprus, a detailed table is available online. The EU estimates that by 2022 all Member States (but Malta and Cyprus) will have access to three sources of gas and 23 Member States will have access to the global LNG market.
Increase of LNG Imports from the U.S.
Since July 2018, cumulative EU imports of liquefied natural gas from the U.S. have increased by 272%.With a share of 12.6% of EU-LNG imports in 2019 so far, the U.S. is Europe’s third biggest supplier of LNG, while Europe has emerged the primary destination of the U.S. LNG in January to February this year ahead of Asia. The European Union is ready to facilitate more imports of liquefied natural gas from the U.S., if the market conditions are right and prices competitive. This will allow U.S. exporters to further strengthen their position on European markets whilst contributing to the EU’s objectives of security of supply and diversification.
Current figures show that:
In the nine months since the 25 July 2018 Joint Statement, cumulative EU imports of U.S. LNG are up by 272% relative to the period beforehand, a total of 10.4 billion cubic meters (bcm).
In terms of the EU’s total imports of LNG, the U.S. share was 13.4% over the last six months, compared to 2.3% before the Joint Statement.
Since early 2016, the EU has received more than 110 LNG cargoes from the U.S. In 2017 Europe represented more than 10% of total U.S. LNG exports, up from 5% in 2016. In the 2018 calendar year, some 11% of US LNG exports went to the EU market. However, in the 9-month period since the Joint Statement (August 2018 – April 2019), this share rises to nearly 30%.
IRENA and UN agree to jointly combat desertification through renewables
The International Renewable Energy Agency (IRENA) and the Secretariat of the United Nations Convention to Combat Desertification (UNCCD) are joining forces to support climate adaptation and resilience and to implement UN Sustainable Development Goals through renewables.
In a Memorandum of Understanding signed today by IRENA’s Director-General Francesco La Camera and UNCCD’s Executive Secretary Ibrahim Thiaw, the two organisations have agreed to increase renewable energy capacity building and investment on the ground, get a better understanding of the land and renewable energy nexus and undertake joint outreach activities. The agreement was signed on the sidelines of the Conference of Parties to the United Nations Convention to Combat Desertification (COP14) which currently takes place in New Delhi, India.
“Today, renewable energy is the most effective climate action tool available. But renewables can play an important role in combating desertification and land degradation too”, said IRENA’s Director-General Francesco La Camera. “By signing today’s MoU, we intend to strengthen collaboration with the UN on country and regional support activities that accelerate renewables deployment as a component of a broader strategy to expand access to energy, foster sustainable development, biodiversity and climate resilience.”
“Renewable energy is one of the solutions to restore land, as it can help conserve food or develop irrigation systems. There are a lot of areas for cooperation,” UNCCD’s Executive Secretary Ibrahim Thiaw said, adding that he expects renewable energy to be among the issues that could come up as a request from our Parties, in their efforts to halt and reverse land degradation.
Sustainable energy can stimulate land restoration and conservation efforts and improve the economic sustainability of projects undertaken. For example, renewables can electrify rural health centers, provide solutions in the agri-food sector and alleviate poverty through integrated rural community development projects. In regions like Africa and particularly the Sahel, additional bioenergy production through land restoration activities can generate further benefits by lightening the burden of energy in security while generating employment and income, thereby reducing poverty.
ADB-Supported Solar Project in Cambodia Achieves Lowest-Ever Tariff in ASEAN
The auction for 60 megawatts (MW) of solar photovoltaic (PV) capacity conducted by Electricite du Cambodge (EDC), Cambodia’s national electricity utility, has led to the lowest bid of 3.877 cents (US dollar) per kilowatt hour by Prime Road Alternative Company Limited. The project, supported by the Asian Development Bank (ADB), drew 26 bidders, including several global companies, and has achieved the lowest power purchase tariff for a solar project so far recorded in Southeast Asia.
The 60 MW project is part of a 100 MW National Solar Park and is structured as a public–private partnership. EDC is providing the land and transmission access, while the private sector will provide power generation capacity based on a long-term power purchase agreement with EDC. ADB served as the transaction advisor for the project, through the Office of Public–Private Partnerships, while also providing a sovereign loan blended with climate finance funds to finance the transmission line and substation for the solar park. The project preparation work was carried out by ADB with the support of the governments of Canada and Singapore.
“The record low prices show the power of competition. This is a new era for renewable energy development in Cambodia and the region, and particularly for solar power generation. This is good news for EDC and the people of Cambodia,” said the Director of ADB’s Office of Public–Private Partnerships Mr. Siddharta Shah. “We believe more governments in the region will adopt auction as a strategy to procure renewable energy generation capacity, and this structure and tariff will serve as a benchmark for future projects.”
“Expanding solar generation is aligned with the country’s goal of increasing access to affordable and reliable sources of electricity,” said ADB Principal Climate Change Specialist Mr. Pradeep Tharakan. “ADB, as a trusted development partner of the government, is working toward the long-term development of the energy sector in the country.”
ADB’s other ongoing support to the country’s energy sector includes financing for the expansion and strengthening of the national grid; the development of a comprehensive power development plan through 2040; and the piloting of innovative technologies, including energy storage systems.
IEA and ASEAN: “Key strategic partners” in pursuit of Southeast Asia’s energy goals
Dr Fatih Birol, the IEA’s Executive Director, took part in the 37th ASEAN Ministers of Energy Meeting (AMEM) in Bangkok on 4 September.
Dr Birol gave the opening presentation of the AMEM, discussing with Ministers the energy challenges facing ASEAN, as set out in the IEA’s forthcoming 2019 Southeast Asia Energy Outlook, and presenting the results of the IEA’s extensive work with ASEAN. As part of this, he highlighted the results of the IEA’s work in response to the ministerial mandates it received at the 2018 AMEM in Singapore, related to how the region can boost regional power trade, boost energy efficiency and speed up renewables integration.
ASEAN ministers released a Joint Ministerial Statement at the completion of the AMEM that expressed their “appreciation to the IEA Executive Director for contributing to stronger ASEAN-IEA institutional ties and advancing ASEAN energy priorities.” They confirmed that “the IEA is a key strategic partner to ASEAN in helping the region tackle its energy challenges across all fuels and all technologies”. Ministers also called for further “strengthening of the ASEAN-IEA partnership in 2019-2020, specifically through joint projects to increase regional power trade and renewables integration, enhance buildings energy efficiency, boost energy security and enhance energy data quality.”
On the margins of AMEM, Dr Birol met with ministers from various Southeast Asian countries, including three IEA Association countries (Indonesia, Thailand and Singapore) and the next AMEM chair, Viet Nam, to discuss the IEA’s engagement with the region and with the countries bilaterally.
While in Bangkok, Dr Birol also gave a special address at the ASEAN Energy Business Forum. His remarks focused on key global trends in energy markets and their implications for Southeast Asia.
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