Released July 27, 2022 | SUGAR LAND
en
Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--European delegates searching desperately for alternatives to Russian gas spent much of last week courting officials from resource-rich Azerbaijan, though a U.S. government eager to promote energy security seems to have missed the memo.
EU President Ursula von der Leyen signed a memorandum of understanding with the Azeri government last week to secure more supplies of natural gas from the Caspian energy giant.
According to Azerbaijan's Trend News Agency, both parties agreed to increase volumes running through the network of pipelines dubbed the Southern Gas Corridor, from about 280 billion cubic feet per day to as much as 420 billion cubic feet per day.
"This will help compensate for cuts in supplies of Russian gas and contribute significantly to Europe's security of supply," a joint statement read.
The Southern Gas Corridor consists of the South Caucasus pipeline, the Trans-Anatolian pipeline and the Trans-Adriatic network. It was a point of considerable interest in the mid-2000s as contractual disputes between Russian energy company Gazprom and Ukraine, which hosts a vast network of Soviet-era natural gas pipelines to Europe, left consumers scrambling to find adequate supplies.
A series of gas crises later, however, and the European market still depends heavily on natural gas from Russia. Russia last year supplied Europe with about 40% of its natural gas needs, but European measures that greeted the February invasion of Ukraine caused the bloc to try to cut that to 15% below the five-year seasonal average starting in August.
Alternatives are desperately needed.
So it was somewhat glaring that the issue was not evidently mentioned when U.S. officials met this week with delegates from Azerbaijan. Instead, the main focus of meetings between U.S. Secretary of State Anthony Blinken and Azeri President Ilham Aliyev was on settling long-simmering disputes with neighboring Armenia.
In fact, the only time natural gas was mentioned during the State Department's regular press briefing was during discussions on ways to punish Myanmar for executing pro-democracy activists. At home, meanwhile, the main focus of the Biden White House seems to be on lowering the price at the pump.
But while discussions with Azeri officials in Washington focused more on national security, the U.S. is doing its part on energy security by way of liquified natural gas. The U.S. Department of Energy on Monday stated the country was the world leader in liquefied natural gas (LNG) exports during the first half of the year.
Click on the image at right for a graph showing monthly U.S. LNG exports from January 2016 to June 2022.
Volumes increased 12% year-over-year to average 11.2 billion cubic feet per day. And while Europe isn't getting all of that, the search for alternatives to Russian gas is helping U.S. ascendancy.
"U.S. LNG exports continued to grow for three reasons: increased LNG export capacity; increased international natural gas and LNG prices; and increased global demand, particularly in Europe," the Department of Energy stated.
But even there, the government notes it's Asia, not Europe, that is the primary destination for LNG exports. From January through May, Asian economies accounted for 46% of the total, compared with 37% for European economies. And even if all of U.S. LNG exports went to Europe, the 11.2 billion feet per day is a drop in the bucket compared with what comes out of the Southern Gas Corridor.
Those data points don't show up in diplomatic cables.
And while Chinese appetite for energy depends in part on its COVID-19 policies, the appetite in Asia is still there. India's GDP, for example, is growing at close to 8%, and that's a downward revision from previous estimates.
That suggests that while exports themselves may do some of the talking for U.S. officials, it remains for natural gas something of a buyer's, rather than a diplomatic, market.
Industrial Info Resources (IIR) is the world's leading provider of market intelligence across the upstream, midstream and downstream energy markets and all other major industrial markets. IIR's Global Market Intelligence Platform (GMI) supports our end-users across their core businesses, and helps them connect trends across multiple markets with access to real, qualified and validated project opportunities. Follow IIR on: LinkedIn.
EU President Ursula von der Leyen signed a memorandum of understanding with the Azeri government last week to secure more supplies of natural gas from the Caspian energy giant.
According to Azerbaijan's Trend News Agency, both parties agreed to increase volumes running through the network of pipelines dubbed the Southern Gas Corridor, from about 280 billion cubic feet per day to as much as 420 billion cubic feet per day.
"This will help compensate for cuts in supplies of Russian gas and contribute significantly to Europe's security of supply," a joint statement read.
The Southern Gas Corridor consists of the South Caucasus pipeline, the Trans-Anatolian pipeline and the Trans-Adriatic network. It was a point of considerable interest in the mid-2000s as contractual disputes between Russian energy company Gazprom and Ukraine, which hosts a vast network of Soviet-era natural gas pipelines to Europe, left consumers scrambling to find adequate supplies.
A series of gas crises later, however, and the European market still depends heavily on natural gas from Russia. Russia last year supplied Europe with about 40% of its natural gas needs, but European measures that greeted the February invasion of Ukraine caused the bloc to try to cut that to 15% below the five-year seasonal average starting in August.
Alternatives are desperately needed.
So it was somewhat glaring that the issue was not evidently mentioned when U.S. officials met this week with delegates from Azerbaijan. Instead, the main focus of meetings between U.S. Secretary of State Anthony Blinken and Azeri President Ilham Aliyev was on settling long-simmering disputes with neighboring Armenia.
In fact, the only time natural gas was mentioned during the State Department's regular press briefing was during discussions on ways to punish Myanmar for executing pro-democracy activists. At home, meanwhile, the main focus of the Biden White House seems to be on lowering the price at the pump.
But while discussions with Azeri officials in Washington focused more on national security, the U.S. is doing its part on energy security by way of liquified natural gas. The U.S. Department of Energy on Monday stated the country was the world leader in liquefied natural gas (LNG) exports during the first half of the year.
Volumes increased 12% year-over-year to average 11.2 billion cubic feet per day. And while Europe isn't getting all of that, the search for alternatives to Russian gas is helping U.S. ascendancy.
"U.S. LNG exports continued to grow for three reasons: increased LNG export capacity; increased international natural gas and LNG prices; and increased global demand, particularly in Europe," the Department of Energy stated.
But even there, the government notes it's Asia, not Europe, that is the primary destination for LNG exports. From January through May, Asian economies accounted for 46% of the total, compared with 37% for European economies. And even if all of U.S. LNG exports went to Europe, the 11.2 billion feet per day is a drop in the bucket compared with what comes out of the Southern Gas Corridor.
Those data points don't show up in diplomatic cables.
And while Chinese appetite for energy depends in part on its COVID-19 policies, the appetite in Asia is still there. India's GDP, for example, is growing at close to 8%, and that's a downward revision from previous estimates.
That suggests that while exports themselves may do some of the talking for U.S. officials, it remains for natural gas something of a buyer's, rather than a diplomatic, market.
Industrial Info Resources (IIR) is the world's leading provider of market intelligence across the upstream, midstream and downstream energy markets and all other major industrial markets. IIR's Global Market Intelligence Platform (GMI) supports our end-users across their core businesses, and helps them connect trends across multiple markets with access to real, qualified and validated project opportunities. Follow IIR on: LinkedIn.
