Europe to Provide Market for 60% of US Liquid Natural Gas by 2020 - Report

Europe is expected to buy up to 60 percent of liquid natural gas (LNG) produced by the United States by 2020, even as US producers face a challenge competing with cheaper priced gas that is available through a series of pipelines, Wood Mackenzie consulting firm said in a report on Friday.

WASHINGTON (Sputnik) — After 2025, however, the report anticipated a drop in US LNG exports to Europe as lower-priced supplies become available and US gas exports are diverted to more lucrative markets.

“While demand is there, some US producers will be unable to recover the cash cost of shipping to Europe, as oversupply forces gas prices to stay low,” a press release explaining the report stated.

The Wood Mackenzie report comes one year after the first shipment of US LNG arrived in Europe.

At the time, the industry publication Oil.com predicted that Russian energy giant Gazprom — which supplies about a third of Europe’s gas through a network of pipelines — would have little difficulty undercutting prices of US LNG suppliers to maintain market share.

Meanwhile, the Wood Mackenzie report and assessments by other analysts point to markets in Latin American and Asia, where demand is expected to increase and supplies from a series of new LNG export terminals in the United States could be competitively priced.