US, UK Sign LNG Deal in Race to Secure Supplies for Next Year




  • In Business
  • 2022-12-07 00:01:00Z
  • By Bloomberg

(Bloomberg) -- Britain and the US agreed to work together to ensure liquefied natural gas keeps flowing next year in an effort to underpin energy supplies threatened by Russia's war in Ukraine.

Most Read from Bloomberg

  • 'Huge, Missing and Growing:' $65 Trillion in Dollar Debt Sparks Concern

  • Wall Street Goes Risk Off as Bank CEOs Sound Alarm: Markets Wrap

  • Ex-Deutsche Bank Trader Builds $6 Billion Fortune on Trading Boom

  • Trump Companies Are Convicted in NY Criminal Tax Fraud Trial

  • Third Russian Airfield Hit by Drone as Moscow Accuses Ukraine

London and Washington agreed to set up a joint action group that will work "with international partners and industry" to ensure at least 9-10 billion cubic meters of American LNG is delivered to the UK over the next year. While that's double the amount exported in 2021, it matches the record volume US producers delivered to the UK this year.

"We will look to identify opportunities to support commercial contracts that increase security of supply," UK Prime Minister Rishi Sunak and US President Joe Biden said in the joint statement. The US commitment includes providing the necessary regulatory environment to achieve the delivery goals.

Britain's accord is a result of the increased global competition for LNG, especially from Asia and the European Union, where Moscow's decision to throttle pipeline gas deliveries is threatening to push the continent's economy into recession. The US-UK agreement provides little clarity on how the LNG supplies will be secured, and Britain has already imported more than 10 billion cubic meters of US LNG this year.

The deal follows a similar agreement the US struck with the EU in March for at least 15 billion cubic meters of additional LNG this year. That accord raised questions over where exactly the supply would come from, as soaring EU gas prices would likely pull the super-chilled fuel to European shores anyway.

While the US filled some of Russia's supply gap by exporting record amounts of LNG from its seven plants, global markets are going to have to wait at least two more years before any new supplies from America come online. Three large-scale projects requiring more than $30 billion of financing are now under construction in Texas and Louisiana, yet none will be ready next year.

Still, the deal has political significance with the UK's Sunak trying to forge new trade deals and diplomatic relations with partners outside of Europe. The countries will collaborate on renewables and nuclear projects to reduce global dependence on Russian exports and help stabilize energy markets.

The partnership also aims to drive international investment in clean energy technologies and work to decarbonize the aerospace, aviation and automotive industries, according to the statement. The first meeting of the group will be held virtually on Thursday.

--With assistance from Gerson Freitas Jr..

Most Read from Bloomberg Businessweek

  • The Club With a 60,000-Woman Waitlist

  • The Viral List That Turned a Yale Professor Into an Enemy of the Russian State

  • How to Cash Out of a Small Business Without Selling Out

  • JPMorgan Is Still Trying to Fix Health Care

  • Twitter Under Elon Musk Still Has to Live in Apple's World

©2022 Bloomberg L.P.

COMMENTS

More Related News

Oil Pushes Higher as China
Oil Pushes Higher as China's Return Poised to Spur Consumption

(Bloomberg) -- Oil climbed on optimism that China's reemergence from Covid Zero will aid demand, with traders looking for fresh clues on the outlook as the...

Russia
Russia's War in Ukraine is Accelerating the Shift Away From Oil and Gas, BP Says

(Bloomberg) -- Russia's war in Ukraine will accelerate the shift away from oil and gas as countries around the world prioritize domestic renewable energy...

North Korea Could Get a Vital Lifeline From Arms Sales to Russia
North Korea Could Get a Vital Lifeline From Arms Sales to Russia
  • World
  • 2023-01-30 00:00:23Z

(Bloomberg) -- Russia's hunt for weapons to fire at Ukraine could provide a lifeline for North Korea, where even a relatively modest arms deal would help...

India
India's Budget to Test Modi's Fiscal Resolve Ahead of 2024 Vote
  • World
  • 2023-01-29 23:00:00Z

(Bloomberg) -- India will unveil its budget Wednesday, testing Prime Minister Narendra Modi's fiscal mettle seen as key to boosting investor sentiment even...

Turkey May Back Finland
Turkey May Back Finland's Bid for NATO Membership, Reject Sweden
  • World
  • 2023-01-29 20:48:47Z

(Bloomberg) -- President Recep Tayyip Erdogan said that Turkey may ratify only Finland's bid to join NATO, in a move that could delay Sweden from gaining...

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply

Comments

Top News: Business