Trump pledge EU to become big importer of US gas met with skepticism

NEW YORK: President Donald Trump said the European Union (EU) would soon become a ‘massive’ importer of US natural gas, but some energy analysts expressed skepticism at such an outcome.

Trump, joined by European Commission chief Jean-Claude Juncker, said Wednesday that the two key economies reached agreement to boost trade of liquefied natural gas (LNG) and soybeans as they defused an escalating trade dispute.

But exporting LNG is an expensive business and likely will not be a big part of European energy anytime soon, experts said.

“What counts for the European consumer is the price,” said Thierry Bros, a researcher at the Oxford Institute for Energy Studies, who noted the lofty costs of US LNG.

After Europe liberalized its energy markets, “the price is set between buyers and sellers at the exchange in Holland,” he added.

Unlike oil, which already is in liquid form, natural gas must first be liquefied at a factory in the US before it is shipped and then re-gasified in Europe at another plant. By contrast, conventional natural gas can just be sent to the EU via pipeline.

“I don’t see how the US can force European clients to buy US liquefied natural gas that is more expensive,” said Matt Smith, analyst at ClipperData.

A senior EU official agreed with that assessment.

“We are not going to turn into a Soviet style economy” that can order up more imports, the official said.

“The EU wants to increase imports... the text does not say that the EU is committing to increase imports. It is not a declaration of intent.” — AFP