New UK-US energy partnership looks to create a more secure gas strategy

Wed 7 Dec 2022
Posted by: Phillip Adnett
Trade News

Gas ship exporting

Britain is to double its gas imports from the US following a new partnership to boost “energy security and affordability” and to limit Russia’s impact on western energy supplies.

Prime minister Rishi Sunak and US president Joe Biden announced the partnership today (07 December) and set up a joint action group led by Westminster and White House officials.

It follows their meeting at the G20 Summit in Indonesia, where they agreed to work to address short-term energy needs and spearhead efforts to speed up energy transition.

Sunak said: “Together the UK and US will ensure the global price of energy and the security of our national supply can never again be manipulated by the whims of a failing regime.”

Knock on effect

According to The Guardian, the UK was not reliant on large quantities of Russian gas before the invasion of Ukraine but has been affected by huge rises in prices as European neighbours competed for supplies.

The US will aim to export at least nine to 10bn cubic met of liquified natural gas (LNG) to UK terminals over the next year, more than doubling the level in 2021, reports the Evening Standard.

The two countries also intend to collaborate on accelerating green initiatives such as decarbonising the aerospace industry, boosting the electric vehicle market and developing energy efficient appliances.

They also plan to collaborate on nuclear, hydrogen and carbon capture projects.

European exports soar

Meanwhile, British exports of natural gas to Europe have hit a six-year high as the continent tries to drop its own reliance on Russian energy, reports the Telegraph.

Flows of natural gas through the UK’s interconnector pipeline to Belgium were at the highest levels since at least 2016 on Sunday and Monday, according to data from Elexon, which manages electricity trades.

Data from the Independent Commodity Intelligence Service (ICIS) showed that warm weather in October and November helped Europe to reduce gas demand by a quarter, but that this demand is rising due to an expected snap of cold weather.

Nathan Piper, head of oil and gas research at Investec, told City AM that the record gas exports reflected the significant LNG import facilities in the UK and the demand in EU to source alternatives to Russian gas.

“The UK lack of storage really reflect a weakness in security of supply but with import routes from Norway, LNG and North Sea production overall the UK is in a better position than many European countries,” he said.