The Department of Energy said Wednesday that it will authorize additional exports of liquefied natural gas in an effort to reduce supply shortages, the latest Biden administration effort to boost supply of the fossil fuel in response to a massive increase in European demand due to the war in Ukraine.
Wednesday’s order raises the output thresholds for Magnolia LNG, a Louisiana-based company, and Golden Pass LNG in Texas. Both companies had submitted requests to the DOE seeking to increase their total approved export volumes.
The department authorized Golden Pass’s request to increase exports from 15.6 million metric tons per year to 18.1, bringing exports to a total of roughly 3 million metric tons per year. Separately, it granted Magnolia’s request to increase export thresholds from 8 to 8.8 million metric tons per year.
Importantly, the DOE order also allows the companies to export gas to countries that do not currently have a free trade agreement with the United States, including in Europe.
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The news comes hours after Russian state-owned gas supplier Gazprom halted its gas flow to Poland and Bulgaria after the two nations refused to comply with a decree to pay for their supply in rubles.
The Biden administration has agreed to provide at least 15 billion cubic meters of additional LNG this calendar year from the U.S. and other sources. Neither project will help the administration immediately meet that goal, however, as neither Golden Pass nor Magnolia is currently operational. The DOE estimates Golden Pass will begin producing in 2024, while Magnolia’s status remains up in the air.
The projects could be helpful to the administration's separate goal to work toward providing roughly 50 billion cubic meters per year of additional U.S. LNG through 2030.
“We want to signal we want to partner and make sure our restrictions in the United States of permitting for non-free trade agreement entities like the EU are not a barrier,” Energy Secretary Jennifer Granholm said Wednesday, speaking alongside EU Commissioner for Energy Kadri Simson in an event about offshore wind.
“And so making sure we are able to allow those who intend to produce have the freedom to ship to Europe as part of that strategy,” she said.
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The news comes on the heels of last month’s announcement from the Biden administration that it will authorize additional export volumes from Cheniere Energy's Sabine Pass and Corpus Christi facilities, allowing the company to ship 0.72 billion cubic feet of LNG per day more than previously authorized.