During Europe’s energy crisis, the US stepped up its supply of liquefied natural gas to the region to replace Russian fossil fuels.

However, looking ahead to growth of the US LNG market in the coming years, Asia is likely to be the biggest supporter in the long term.

The US has been an ideal last-minute LNG supplier to Europe given that most of its LNG cargoes are free-on-board, meaning they don’t have a destination clause built into the contract. Cargoes that were set for Asia were able to be diverted to Europe instead.

“That means those volumes can go to whatever market they deem fit, or whatever market can pay the highest price. That’s why we see the highest flexibility coming from the US and saving Europe [in 2022],” Emily McClain, vice president of North America gas markets at Rystad Energy told Upstream.

Despite the push for US LNG to aid Europe’s energy crisis, the burgeoning US liquefaction capacity is seeing long-term contracts come out of Asia, not Europe.

“Trends from a long-term perspective haven't changed with the invasion of Russia and Ukraine, we still see Asia is going to be the primary seeker for LNG, then secondary to that is Europe,” McClain said.

Nick Dell’Osso, chief executive of Chesapeake Energy, added at the NAPE conference that Asia is where the demand for LNG is growing.

“The demand for natural gas is growing much more rapidly in Asia in this era. You have a single event-driven need for natural gas in Europe, that isn't about long-term demand growth,” Dell’Osso said.

The US is working on growing its LNG capacity 1.5 times by the end of the decade, which will rely on long-term growth of the global LNG market.

A slew of new US LNG projects, including Rio Grande LNG, CP2, Commonwealth LNG and Corpus Christi Stage 3, are set to come online around 2026.

Several of these projects are securing long-term deals, many from Asia, to support their final investment decisions’ schedules.

“Is it popular in Europe, to come to Commonwealth LNG and say ‘give me a 20-year deal starting in three years from now'?

"That answer is no, it's dangerously close to 2046, which is dangerously close to their 2050 carbon neutral goals,” Paul Varello, founder and chairman of Commonwealth LNG, said at the conference.

With demand growing in Asia as energy needs expand and natural gas can be used to replace coal and wood, the region presents the opportunity to grow the LNG market as a way to reduce global greenhouse gas emissions.

“What about all those other growing countries that are currently sitting there burning wood or coal? How do we clean up our environment by getting past those markets? That's where the real growth will come from,” Varello said.

“Don’t forget, what we’re doing in Europe is simply substituting one source of gas for another source of gas. We’re not growing the market like we can internationally, around the world.”

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