Will Germany’s decision to buy US gas make much sense for market?

Oil&Gas Materials 3 November 2018 13:01 (UTC +04:00)

Baku, Azerbaijan, Nov. 3

By Leman Zeynalova – Trend:

Developing the liquefied natural gas (LNG) import infrastructure is a good option for Germany, Emma Richards, oil and gas analyst with BMI Research told Trend, commenting on the decision made by Chancellor Merkel to open Germany up to US liquefied natural gas.

"It increases the security of their supply and puts them in a stronger position in negotiations with their pipeline suppliers. The US is providing most of the LNG export growth over the next five years, so there’s certainly opportunities for some of that gas to come into Germany but, as with anywhere in Europe, it will have to compete with other supplies," said Richards.

As for the impact of this decision on the overall European gas market, the expert said she thinks this gets a little overblown.

"US LNG will play a role in Europe, but it’s by no means reshaping the market and I don’t see it as any real threat to Russia, at least not in the foreseeable future," added Richards.

Earlier, German chancellor Merkel offered government support to efforts to open up Germany to US natural gas.

Merkel reportedly told a group of lawmakers earlier this month that her government would co-finance a 500 million euros ($576 million) liquefied natural gas shipping terminal in northern Germany, giving a vital boost to a project that has been stalled for years.


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