(The author is a Reuters Breakingviews columnist. The opinions expressed are his own.)
By George Hay
LONDON, March 27 (Reuters Breakingviews) – Gulf conflict has pushed European and Asian liquefied natural gas prices higher, but not American ones. Those with lots of US supply, like Shell and TotalEnergies, can make tidy trading margins. And $41 bln Venture Global, with a boatload of un-contracted LNG, has struck gold.
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CONTEXT NEWS
European gas prices could hit $40 per million British thermal units (mmBtu), over the summer if the Gulf conflict persists, TotalEnergies Chairman and CEO Patrick Pouyanné told CNBC on March 24.
Pouyanné said prices could move substantially higher than their current $18 per mmBtu if the war drags on, since Asian demand rises over the summer just as Europe looks to refill its storage.
Roughly 15% of TotalEnergies’ production is offline following attacks on facilities in the Gulf, Pouyanné said.
Venture Global and Edison said on March 26 they had reached an agreement to settle a long-running arbitration dispute related to accusations that the American exporter of liquefied natural gas failed to provide the Italian firm with contractual shipments.
In a statement to Breakingviews, Venture Global said its production of commissioning cargoes during the construction and commissioning of its facilities had been “a critical stabilizing force in the global LNG market” during both times of price stability and periods of historic disruption. “During this latest period of disruption due to the conflict in the Middle East, the United States – and its LNG industry – are once again playing a critical role in supporting global energy security and Venture Global stands ready to keep energy flowing to our allies and customers worldwide,” it said.
“To be clear, fluctuating market conditions have no impact on our previously communicated contractual schedule,” it added. “As previously stated, Phase One at Plaquemines remains on target to declare COD (Commercial Operation Date) in Q4 2026.”
(Editing by Liam Proud; Production by Streisand Neto)