Energy, Gas, Gas Market , Lithuania, USA

Former-Lithuanian Energy Minister Jaroslav Neverovic welcomes the EC initiative to hold negotiations with American partners.

"I believe chances are good to create those conditions for Europe to buy gas from America easier, without any restrictions, and also to facilitate gas exports for Americans. I think it's good for obvious energy security and also commercial reasons, including price pressure and lowering the ceiling for Russian gas," Neverovic told.

Viktorija Ditmonaite, head of wholesale at Litgas, says the European Union and the United States as well as LNG exporters and importers have said many times already that commercial decisions on the purchase of LNG are made by companies themselves and governments can only help by lifting international trade barriers, formalities etc.

"So they are most likely to focus on this area because neither the United States, nor the EU countries regulate commercial conditions. They will probably speak about additional permits which US exporters who want to export LNG to Europe still need. It would get things moving and reduce burden for the developers of new US LNG plant projects," Ditmonaite told.

Meanwhile energy experts Romas Svedas says it's difficult to evaluate the contents of this visit but, he says, it's probably more of a political signal than an attempt to negotiate technical details.

"I would say it's more of a political and not technical visit. (…) This envoys' visit to America, I would say they are sending more of a political signal that cooperation is being strengthened and that Europe is open and has huge capabilities, including our Klaipeda terminal. (…) I would call this visit a positive thing," Svedas, a lecture at the Institute of International Relations and Political Science at Vilnius University, said.

In his words, differences in technical standards or their adaption should not be a key obstacle for EU-US trade. What is more important is the price.

"The price is the key leverage in trade, and if America is able to compete on the LNG market in Europe, so that will be the key and defining factor. Our terminal received American shipments last year. Yes, that's possible, and America showed that the price is competitive and that it's capable of competing here in Europe," Svedas said.

Ditmonaite also echoed his view that the price of American LNG is the key thing for it to enter the European market.

"Everything that makes the way for American LNG to Europe easier applies to Lithuania as well. Lietuvos Duju Tiekimas (Lithuanian Gas Supply) imported two American LNG shipments last year, contacts with American LNG exporters are being constantly maintained and new ones are being made. But the key thing is the price as LNG from the United States and other countries have to compete with Russian gas in the Baltic states, supplied via pipelines," Ditmonaite explained.

Svedas also paid attention to the fact that the United States' position on the exports of its gas changed with the arrival of a new administration. Although the country produces shale gas for quite some time, the previous administration, led by Barack Obama, restricted exports of American gas, and the country's weight on the global gas market is now fairly low. Incumbent American President Donald Trump wants to increase the country's trade balance for its benefit.

"He wants to go into the world and, first of all, do it with natural gas. (…) Now a huge fight on the LNG market will take place and America is in a hurry to enter this market," Svedas said.

Europe has imported 474 mln cubic meters (five shipments) of American LNG this year, which made 2.7% of America's whole LNG exports. Last year, Europe received 2.106 bln cubic meters, or 11.3% of America's whole LNG exports.