Lithuanian gas firm Litgas has signed a preliminary deal to purchase liquified natural gas (LNG) from America’s first LNG export facility in Louisiana. Reuters reports:
The Baltic states and Poland are looking to imports from the United States to reduce their dependence on supplies from Russia. Lithuania opened a floating import terminal last year and Poland plans to open another one later in 2015.U.S. LNG exporters are looking to the small Baltic states and Poland as hopes fade for a boom in Asian demand for cheap North American natural gas.North America’s first LNG export terminal, Cheniere Energy Inc’s Sabine Pass, is expected to send first cargoes by late 2015. “We can begin receiving cargoes as early as 2016 to match demand,” Litgas Chief Executive Dominykas Tuckus said.
Lithuania constructed an offshore LNG import platform and tellingly named it the Independence. The small eastern European country was, like many of its neighbors, unhappy with the long-term, expensive, take-or-pay contracts it was forced to sign with Russia, and so chose to leverage its access to the Baltic Sea by building out gas import infrastructure. And while the recent deal signed with the U.S. LNG producer is non-binding, it is a sign that the fruits of America’s shale boom could be headed Europe’s way quite soon.Litgas isn’t expecting to receive U.S. LNG until some time next year, though demand for the hydrocarbon is set to drop in the coming months as winter’s icy grip recedes from the northern hemisphere. This is a shot across the Kremlin’s bow; for years Russia has taken for granted its ability to wield its gas supplies as a geopolitical weapon in Europe. With demand declining in Asia, it’s looking more and more likely that American LNG will be heading across the Atlantic to weaken Putin’s grip.