Learn more about Hart Energy Conferences
Get our latest conference schedules, updates and insights straight to your inbox.
Europe shouldn’t swap energy dependency on Russian gas with a dependency on U.S. gas, but instead needs a diversified supply source, ENGIE executive vice president Didier Holleaux said during CERAWeek by S&P Global.
Amid uncertainties around future gas supply and demand scenarios, Holleaux told reporters March 8 during a press conference that diversification is the preferred strategy for Europe.
“It's a difficult issue, but we are working on that and expect there will be more contracts signed for gas dedicated to Europe with U.S. LNG producers... It could be Qatar. It could be piped gas from the Caspian Sea, it could be more gas coming from Algeria [or] Libya,” Holleaux told reporters. “We have to diversify. So, we do not want to replace overdependency to Russia by overdependency to the U.S. We want to have a balanced portfolio.”
However, the executive with Paris-based ENGIE was pleased with the lower emissions aspect of U.S. gas supply and LNG.
“I'm very happy to see that our colleagues in the U.S. gas industry are taking commitments and making great efforts to reduce their environmental footprint, be that in the production or the liquefaction stage,” Holleaux said.
In Europe, he said discussions are ongoing on two key matters, among others, about future gas supply. The first relates to Europe creating some type of central scenario about the makeup of its energy mix between now and 2045. The second, to decisions that could encourage companies to secure long-term gas contracts.
Those decisions will assist Europe to overcome its current energy crisis sometime in 2026 to 2027 at the latest, Holleaux said. “By then, we will have secured new sources of gas, which will put Europe back on track to be independent of Russian gas,” he said.
Moscow’s decision in February 2022 to invade Ukraine wreaked havoc on Europe as the continent was forced to scramble to find new gas supplies after drastic reductions in Russian shipments, allowing U.S. LNG to become an even more important supply source.
As a result, Europe boosted its LNG imports by 60% in 2022 to 121 million tonnes, offsetting lower Russian pipeline imports, energy giant Shell Plc said in a recent LNG study.
RELATED
Shell LNG Outlook Highlights Risks to US Gas Market
Uncertainties around European LNG needs
Exactly how much LNG Europe will need this year is unknown, but will depend on prices in Europe and Asia and what China will do after reopening its economy, Holleaux said.
More difficult to predict is what affect China would have on supplies this year and next after slowing its conversion in 2022 from coal to gas to send LNG to Europe.
“In the short term, we very much depend on the price level and therefore… on the demand of all the regions of the world,” Holleaux said in response to a question from Hart Energy. “In the long term, then, we should be our own masters… [that] means that it's up to us, European players, to sign the long-term contracts, we need to secure supply of either pipe-gas or LNG to Europe in the long-run.”
Holleaux said Europe still faces uncertainties over the next three-to-five winters, but said Japan’s decision to restart some nuclear power plants would free up LNG and put downward pressure on the global energy market.
Recommended Reading
Kimmeridge Fast Forwards on SilverBow with Takeover Bid
2024-03-13 - Investment firm Kimmeridge Energy Management, which first asked for additional SilverBow Resources board seats, has followed up with a buyout offer. A deal would make a nearly 1 Bcfe/d Eagle Ford pureplay.
Laredo Oil Subsidiary, Erehwon Enter Into Drilling Agreement with Texakoma
2024-03-14 - The agreement with Lustre Oil and Erehwon Oil & Gas would allow Texakoma to participate in the development of 7,375 net acres of mineral rights in Valley County, Montana.
NOV's AI, Edge Offerings Find Traction—Despite Crowded Field
2024-02-02 - NOV’s CEO Clay Williams is bullish on the company’s digital future, highlighting value-driven adoption of tech by customers.
Todd Holdco to Invest Further into Northcliff Resources
2024-01-24 - Todd Holdco will acquire 37,333,333 common shares in Northcliff at CA$0.01875 (US$ 0.014) per common share.
Hess Corp. Boosts Bakken Output, Drilling Ahead of Chevron Merger
2024-01-31 - Hess Corp. increased its drilling activity and output from the Bakken play of North Dakota during the fourth quarter, the E&P reported in its latest earnings.