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    EU Urges End to 'US LNG Red-Tape'


US restrictions over the export of LNG to the European Union should be scrapped, Brussels has stated, saying it is willing and open to receive extra shipments.

by: Mark Smedley

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EU Urges End to 'US LNG Red-Tape'

The European Commission (EC) said August 9 that increasing imports of US LNG into the European Union since April 2016 are welcome, but that US red tape over their export should be scrapped.

It said that since the first US LNG arrived in the EU (at Sines, Portugal) in April 2016, more than 40 US LNG cargoes have been imported, amounting to the equivalent of 2.8bn m3 gas.

But US legislation still requires prior regulatory approval for LNG to Europe, it added: “These restrictions need to be addressed and US rules made easier for US LNG to be exported to the EU.”

US president Donald Trump and EC president Jean-Claude Juncker set up an executive working group at their July 25 meeting in Washington DC. Since then, the EC says contacts have taken place between both men, and between EU trade commissioner Cecilia Malmstrom and her US trade representative Robert Lighthizer, and also between Juncker’s top adviser Martin Selmayr and White House chief economic adviser Larry Kudlow. 

The EC said it has been agreed that on August 20 Juncker’s trade adviser and a senior EU trade official will travel to Washington DC to meet their US counterparts to continue work on implementing both sides’ July 25 joint statement: “In this context, the EU and the US are working within the framework of this executive working group to increase US exports of LNG to Europe.”

"The EU has no non-market barriers for US natural gas coming to the EU. The EU is seeking similar treatment from the US side, in particular as regards the removal of the requirement for prior approval of LNG to the EU," the Brussels-based EC added. One of its grumbles is believed to be the US Dept of Energy classes EU countries as 'non-free trade agreement' (non-FTA) countries, which means US export projects are required to meet a higher regulatory threshold in order to ship to the EU. 

The latest move by Brussels should be seen not only in the context of: the US imposing tariffs on EU steel and aluminium exports earlier this year - with the EU retaliating with tariffs on US soybean and other exports; but also in the light of last week's Chinese announcement of a planned 25% tariff on imports of US LNG, not yet enforced, in retaliation for earlier US tariffs already set on Chinese steel.

Spare EU regas capacity

The EC said that the European Union has co-financed. or committed to co-finance, LNG infrastructure projects worth over €638mn ($740mn) - examples including new or expanded import capacities in the Adriatic Sea (on the island of Krk in Croatia), in the Baltic Sea notably in Poland, and in the Mediterranean Sea in Greece.

The Krk project though has yet to take a final investment decision. The commission also noted that there is about 150bn m3/yr spare LNG import capacity across the EU; all of this is commercially operated.

In 2017 Europe represented more than 10% of US LNG exports, up from 5% in 2016, it added.  

The EU has little control or role in LNG imports into Europe: the EC vets that cargoes don't come with restrictions on their intra-EU destination or resale attached - but US cargoes don't carry any such strings.