Conoco Signs Long-Term LNG Deal With Dutch Terminal
Conoco Signs Long-Term LNG Deal With Dutch Terminal | OilPrice.com
Conoco Signs Long-Term LNG Deal With Dutch Terminal
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ConocoPhillips has inked a 15-year LNG supply deal with Netherlands-based Gate Terminal that would expand Conoco’s gas presence in Europe by 1l.5 million tons in regasification capacity annually.
The deal will become effective in 2031 and will boost LNG supply for the Netherlands and Northwestern Europe from that year onwards.
It is the latest example of a deepening EU divergence between words and actions. While Brussels and national government officials cheer their new independence of Russian gas and reduced dependence on hydrocarbons in general, thanks to a buildup in wind and solar, companies quietly sign deal after deal for long-term natural gas supply.
Conoco was part of one such deal closed last November, for deliveries of Qatari LNG to Germany’s brand-new LNG import terminal in Brunsbüttel. Cheniere Energy also recently signed a long-term LNG supply deal with Germany’s chemicals giant BASF.
This may be only the beginning of a wave of long-term supply deals for the continent as the realization that wind and solar can’t do the job of gas sets in. Indeed, the very presence of long-term deals at all is sign enough that the realization is setting in. Previously, European gas buyers were not big fans of long-term purchase commitments at all.
Until last year, Europe was actually a fan of the spot LNG market. That was when its intake of LNG was minuscule compared to current import rates, and LNG prices were low thanks to all the large-scale projects that had come online within a short time.
Now, with almost no Russian gas, Europe needs all the LNG it can get to keep its head above the surface. Prices on the spot market can easily become unpalatable in this situation, hence the newfound European appetite for long-term commitments. Just when the IEA’s Fatih Birol said natural gas demand was about to peak soon.
By Irina Slav for Oilprice.com
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Related Knowledge Center: Liquefied natural gas
Driven by plentiful natural gas produced from shale plays, the United States began exporting liquefied natural gas in 2016 when the Sabine Pass terminal in Louisiana opened and shipped its first cargo. Since then, additional capacity, or trains, have been added to Sabine Pass, and terminals have become operational in Cameron Parish, La.; Hackberry, La.; Cove Point, Md.; and Corpus Christi, Texas. The Energy Information Administration projects that U.S. LNG export capacity will reach 8.9 billion cubic feet per day (Bcf/d) by the end of 2019, making it the third largest in the world, behind Australia and Qatar. The tariff war with China has the potential to impact some final investment decisions for additional terminals in the coming months.