International news agency Bloomberg published an extensive article highlighting the warning issued by Atlantic SEE LNG Trade chief Alexandros Exarchou about the increasing difficulty of securing long-term liquefied natural gas (LNG) supply agreements with American suppliers, following disruptions caused by the Iran conflict in global markets.
Competition between European and Asian buyers for American LNG has intensified following the Middle East conflict, which led to the closure of the Strait of Hormuz, restricting approximately one-fifth of global supply and sending spot market prices soaring. This makes American companies more reluctant to sign 20-year contracts that Atlantic SEE is seeking, as it attempts to strengthen Greece’s role as a regional LNG hub.
“American suppliers have become unwilling to commit to a price for a long period,” CEO Alexandros Exarchou stated at the OT Forum. “The situation is different from six months ago, when they were actively seeking such long-term agreements,” he added. Uncertainty regarding price developments — following damage to Qatar’s largest LNG export terminal — means that some American suppliers are even offering incentives to reduce volumes under existing contracts, added the Actor Group CEO.
Due to the large capital commitments required for constructing and financing LNG projects in the US, smaller buyers may struggle to secure long-term contracts with American sellers. Much of American production has already been committed through long-term contracts with European and Asian clients.
Bloomberg notes that Atlantic SEE – a joint venture between the Actor Group and DEPA Commercial – concluded a 20-year agreement in November with Venture Global Inc. to import 4 billion cubic meters of LNG annually from 2030. Most of this volume will be channeled to neighboring countries, including 1 billion cubic meters for Albania and 0.5 billion cubic meters for Bosnia-Herzegovina.
Meanwhile, the international news agency emphasizes that the company seeks to complete negotiations with Romania by the end of summer, which would increase total agreed supplies to 3.7 billion cubic meters annually, according to Exarchou, who is also chairman and CEO of Actor Group. Greece’s effort to secure American LNG deals coincides with the European Union’s gradual phase-out of Russian natural gas imports by the end of this year.
If agreements with Bulgaria and Ukraine are achieved later this year, Atlantic SEE will pursue additional LNG contracts from the US, increasing total supplies to up to 8 billion cubic meters. The company is also exploring potential agreements with countries like Serbia, Croatia, and North Macedonia.
While the Venture Global agreement protects Atlantic SEE from market volatility, Bloomberg comments, the price of 20-year contracts has increased significantly, according to Alexandros Exarchou. “We are discussing additional quantities with various US suppliers,” the CEO stated, estimating that spot market prices will increase significantly from September.
Alexandros Exarchou also warned that the European Union has not yet adopted targeted measures to limit adequacy risks this winter, as the region attempts to replenish reduced natural gas reserves during summer.
