EU firms to stockpile more LNG

The Wall Street Journal reports that European companies are preparing to accumulate liquid natural gas (LNG) reserves. Many firms have already started negotiations with LNG producers to secure energy for the coming years. The WSJ article says that the European Union’s gas storage is around 95% full. However, the EU countries anticipate that gas imports may be difficult to establish. The reason lies in the fact that they are mostly cut off from Russian supplies. According to The Wall Street Journal, German BASF and Uniper have held talks in recent weeks with LNG exporters from the US and other countries about gas-supply deals. The companies want to sign long-term supply contracts and negotiate lower LNG prices. However, US suppliers are not willing to sell LNG at a discount since its price includes rising inflationary costs, transportation costs, and financial risks. Currently, there are 103.7 billion cubic meters of gas in European storage facilities. Germany obtains the largest reserve of 23.8 billion cubic meters. As for the other EU countries, Italian gas reserves are 17.8 billion cubic meters, France has 12.9 billion cubic meters, and Austria holds 8.9 billion cubic meters. These countries account for over 60% of LNG reserves in the European Union. Earlier, Western countries imposed more sanctions on Russia amid the Russia-Ukraine conflict. This triggered a surge in electricity, fuel, and food prices in Europe and the United States. According to analysts, the anti-Russian sanctions will severely damage the global economy in the long term.