Portuguese Galp Energia has bought the first European cargo loaded with US natural gas, which started its way from Cheniere’s Sabine Pass facility, in Louisiana, to Port of Sines in Portugal at the end of April. According to experts cited by The Wall Street Journal, this is the first shipment in a trade relationship that could shake up the European market.
The 970-foot long tanker The Creole Spirit, carrying Liquefied Natural Gas (LNG), is the sixth cargo to be exported by Cheniere Energy Inc’s project but the first to go to Europe, Reuters wrote.
Analysts predict that this new trade could trigger a price war, leading to lower prices for consumers that could act as a shot in the arm for the struggling European economy. “It’s the start of the price war between US LNG and pipeline gas,” said Thierry Bros, an analyst at Société Générale.
At current prices, US LNG delivered to Europe would cost around $4.30 per million British thermal units, according to price reporting agency Argus Media. Meanwhile, Russia sells its gas to Europe for $5.80, on average. However, analysts say that Russia could drastically lower prices in a price war, to below $3.