EU and US sign LNG deal to cut reliance on Russia

26 March 2022

The European Union and United States signed a deal on March 25 that will see the US supply an additional 15 billion cubic metres (bcm) of liquefied natural gas (LNG) to Europe in 2022, with expected increases going forward. The announcement was made as President Joe Biden met with EU leaders to discuss ways to curb Europe’s reliance on Russian fossil fuels following its invasion of Ukraine.

Image: European Union

The deal will see the creation of a joint Task Force that will organise its efforts around two primary goals: diversifying LNG supplies in alignment with climate objectives and reducing demand for natural gas in order to strengthen European energy security and help reduce dependence on Russian oil and gas.

In a statement, the White House said the agreement’s long-term aim is ensuring, until at least 2030, demand for approximately 50 bcm/year of additional US LNG that is consistent with both US and EU net-zero goals.

The US and EU will work together to reduce the greenhouse gas intensity of all new LNG infrastructure and associated pipelines, including through using clean energy to power onsite operations, reducing methane leakage, and building clean and renewable hydrogen-ready infrastructure.

In addition, the European Commission will prepare an upgraded regulatory framework for energy security of supply and storage, as well as working with EU Member States to accelerate regulatory procedures to review and determine approvals for LNG import infrastructure.

In relation to its second objective of reducing demand for natural gas, the joint Task Force will engage key stakeholders, including the private sector, and deploy immediate recommendations to reduce overall gas demand by accelerating market deployment of clean energy measures. The White House has said immediate reductions in gas demand can be achieved through energy efficiency solutions such as ramping up demand response devices, including smart thermostats, and deployment of heat pumps.

The US and European Commission will also work to expedite planning and approval for renewable energy projects and strategic energy cooperation, including on technologies such as offshore wind. There will also be continued collaboration to advance the production and use of clean and renewable hydrogen to displace unabated fossil fuels and cut greenhouse gas emissions, which will include both technology and supporting infrastructure.