Cairo — Europe is likely to be a prime destination for US LNG cargoes well into the next decade as shipping costs make Europe preferable to Asia as a destination for US exporters, Massimo Mantovani, head of gas and LNG marketing at Italy's Eni, said Monday.
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Speaking to journalists at the EGYPS conference in Cairo, Mantovani said the situation could change around 2024 as projects come on stream in various parts of the world, including Qatar, Mozambique and the US. He highlighted as an example a final investment decision taken earlier in February by ExxonMobil and Qatar Petroleum to develop the Golden Pass export project in Texas.
"At the moment, the European market pays a good price, for sure better than the Asian market [taking into account] shipping costs," Mantovani said. "Probably for the next couple of years we will see US LNG in Italy, because the market is in such a situation that we think there will be room."
"Then we may have a couple of years' gap before all the new projects kick in ... the North field in Qatar, the new joint [Golden Pass] venture between Qatar and the US, and if you consider Mozambique," he said, referring to Eni and ExxonMobil's plans to approve the Rovuma project in Mozambique this year. "You have a lot of LNG coming after 2024."
But Europe's purchases of US LNG will not put an end to the continent's energy security worries, Mantovani added, arguing demand would grow in Europe while production declined.
"There are security worries because the European gas market is growing, not as much as other markets, but it's growing. But the key issue is production is declining, so you do have to have more imports," he said.
"Russian gas is essential for the European market, but it cannot be the only gas supply. [Russia] will reach a level of about 200 Bcm this year -- nearly 40% of the European market. That's a level which will be capped. The new gas which will have to be imported," he added.
(Corrects spelling of Eni executive's surname to Mantovani)
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