By: Reuters – U.S. oil major Chevron Corp (CVX.N) expects high European prices for liquefied natural gas (LNG) to attract a majority of U.S. LNG exports in the short term, a top executive told Reuters on Wednesday.
Europe is determined to wean itself off Russian gas imports following its invasion of Ukraine, a move that has thrown open the door to U.S. suppliers. Its commitment to building import terminals and regasification facilities shows the region’s demand for U.S. exports could last.
“We have seen a big uptick in demand from European customers so we are adjusting to that,” said Colin Parfitt, who oversees the company’s shipping, pipeline, supply, and trading operations. Europe will not “go back to the same flows from Russia as it did before,” he said during an interview in London.
Chevron is a large natural gas producer globally, last year pumping more than 7.5 billion cubic feet per day with more than half of its gas production in the United States and Australia.
The major also produces LNG in Australia and Angola, and recently carved out a foothold in U.S. LNG through purchase agreements with LNG producers Cheniere Energy Inc (LNG.A) and closely-held Venture Global LNG. read more
The United States is the world’s top gas producer with output near 99 billion cubic feet per day (bcfd), but as consumption is lower, at about 89 bcfd, there is room for rising exports with expanding production.
“Gas demand in the United States is roughly flat,” said Parfitt. “What’s growing in the United States is demand for exports,” he said.
Parfitt said Chevron’s oil and gas production in the Permian Basin, the top U.S. oilfield, increased 7% in the first half of 2022 from the same period a year ago, and is expected to grow by 15% in the full year.
Chevron is also studying options to “commercialise” more gas from an Eastern Mediterranean field, off the coast of Israel, either through existing pipelines or some LNG alternatives, he said.