Thu, 01 Dec 2022

European nations are stocking up on gas ahead of winter

UK authorities are looking for proposals from US exporters of liquified natural gas (LNG) to ensure supplies for the nation's domestic buyers under long-term contracts for as long as 20 years, Bloomberg reported on Thursday, citing sources familiar with the matter.

The UK's inquiries come amid a severe power supply crunch that has hit Europe over the past year, and is expected to deepen ahead of the coldest months. European nations have been trying to stock up on natural gas as well as to diversify their fuel sources in the long term.

The volumes Britain is trying to obtain haven't been disclosed, but the agency reported that officials are seeking to buy LNG indexed to the US benchmark Henry Hub gas price, and delivered on an ex-ship basis, where the seller has to deliver the cargo to a fixed buyer and location.

The energy crisis in Europe was exacerbated in early July when gas flows from Russia were reduced due to Ukraine-related sanctions and technical problems with the Nord Stream 1 pipeline.

Britain, which doesn't rely heavily on Russian gas supplies, gets most of its fuel via undersea pipelines from Norway, and LNG shipments. The UK also receives fuel from its own production.

However, London is not entirely protected in the face of the current Europe-wide supply crunch.

On Wednesday, UK authorities announced plans to spend Pound 40 billion ($45 billion) to cap wholesale gas prices for six months. Costs have surged to record highs this year, threatening average consumers and manufacturers with unfordable utility bills.

For more stories on economy & finance visit RT's business section

(RT.com)

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