Litgas, a part of the Lithuanian state-controlled Lietuvos Energija energy company group, said it has signed a memorandum of understanding with Delfin LNG the first offshore floating liquefaction project in the U.S.
It is expected that Delfin LNG’s deepwater port, located in Louisiana, will be operational in 2019, the company said in a statement.
“We are actively investigating the potential supplies from the U.S., signing MOU with one of the first floating natural gas liquefaction project developers marks a significant step towards further potential cooperation, which in the long run can contribute to the objective of diversification of gas supplies in Lithuania,” General Manager of Litgas Dominykas Tuckus said.
In recent years, U.S. gas production has increased due to the shale boom. However, the U.S. gas supply to Europe and elsewhere has until now been unavailable. The first LNG export terminal in the United States is expected to start operation in the second half of 2015.
It is estimated that LNG projects already approved by U.S. authorities will increase the global supply by 30 billion cubic meters per year by 2018, it compares to about 10 percent of current global LNG market. By comparison, the Baltic States consumes annually about 4 billion cubic meters, Litgas said.
Due to warmer than normal winter, the slowdown in economic growth in Asia, the Asian LNG prices dropped to record lows. Therefore, it is expected that the LNG from Atlantic Basin will become uncompetitive in the Asian region and more LNG will be transported to Europe, this should increase the supply and push prices down.