Fierce competition from Asia could make it more difficult to secure new LNG volumes from international markets without paying a very high premium, warned the Chairman and CEO of the AKTOR Group, Mr. Alexandros Exarchou, speaking to “Politico.”
As Mr. Exarchou emphasized, the AKTOR Group is finalizing a 20-year supply contract with the American LNG giant Venture Global for the supply and sale of natural gas to Albania’s Albgaz starting in 2030.
Once this contract, as well as other long-term agreements, are finalized—likely by the end of May—the AKTOR Group will seek to secure additional, shorter-term LNG supply and purchase agreements, something Mr. Exarchou considers necessary, as the war in Iran is putting enormous pressure on the global energy market, while emphasizing, however, that the endeavor will not be easy.
He added that this year it will be particularly difficult to secure significant quantities of LNG from the U.S. at a reasonable price, as he cannot rule out the possibility that companies from Asia will make higher financial offers to LNG suppliers, amid growing competition that has led to an ever-increasing share of LNG cargoes being diverted to the East.
As Mr. Exarchou noted, the result of this new situation may be that Europe will have to accept higher prices in the immediate future, as the problems Qatar is already facing due to the war are compounded by the ban on Russian gas and the limited quantities of LNG currently available on the U.S. market. Consequently, there are no other significant sources of supply.
The head of the AKTOR Group noted that he is optimistic about securing a new preferential, long-term supply agreement for Europe for volumes of U.S. LNG expected to become available starting in 2030. However, he noted that this will also depend on the structural changes brought about by the closure of the Strait of Hormuz.
Mr. Exarchou commented that the long-term prices currently offered by the Group are very low and noted that, regardless of what happens in the future, they will remain competitive.
He stated that the agreements with the U.S. are only one aspect of a broader diversification strategy, noting that Europe must ensure it does not depend on any single party or energy source. In fact, he noted that “energy can be used as a weapon against Europe, which is why we must maintain a balance in the sources of LNG and natural gas we procure.”