UK to announce U.S. gas deal after climate change summit -Telegraph

UK to announce U.S. gas deal after climate change summit -Telegraph
© Reuters. British Prime Minister Rishi Sunak addresses delegates during the COP27 summit at Sharm el-Sheikh, Egypt, November 7, 2022. Stefan Rousseau/Pool via REUTERS

(Reuters) -British Prime Minister Rishi Sunak is poised to announce a major natural gas deal with the United States after the COP27 climate change summit, the Telegraph newspaper reported on Monday.

Britain hopes the United States will promise about 10 billion cubic metres of liquefied natural gas (LNG) over the coming year, the report said, adding that discussions about the deal are in their final stages and an announcement could come in a week or two.

But it also said that wrangling over the exact amount continues and it was possible that a specific figure would not be given when the deal is publicised. It was also unclear how much of the gas – which will be sold by U.S. companies – will be in the UK energy system this winter, the Telegraph said.

Earlier this year, the United States agreed to supply 15 billion cubic metres of LNG to the European Union to help it cope with the energy crisis caused by Russia’s invasion of Ukraine.

Britain’s National Grid (LON:NG) has said that Britain’s ability to secure gas supply would depend upon its prices being high enough to attract exports from Europe and LNG from countries such as Qatar and the United States.

U.S. LNG producers’ ability to supply more fuel will rise only modestly until 2025, when three new plants become fully operational, according to U.S. government estimates. The plants will add 5.7 billion cubic feet per day (bcfd) to the about 11.75 bcfd of exports expected this quarter.

Wholesale gas prices have soared in recent months as economies reopen from COVID-19 lockdowns while high demand for LNG in Asia has resulted in less supply to Europe.

Around 12 British energy suppliers have collapsed this year, affecting more than 2 million customers.

Source: Reuters