{"id":67038,"date":"2025-09-12T10:21:59","date_gmt":"2025-09-12T17:21:59","guid":{"rendered":"https:\/\/energi.media\/?p=67038"},"modified":"2025-09-12T10:21:59","modified_gmt":"2025-09-12T17:21:59","slug":"exxon-gas-deal-in-europe-undercuts-canadian-lng-exports","status":"publish","type":"post","link":"https:\/\/energi.media\/news\/exxon-gas-deal-in-europe-undercuts-canadian-lng-exports\/","title":{"rendered":"Exxon gas deal in Europe undercuts Canadian LNG exports"},"content":{"rendered":"<p><em>This article was published by <a href=\"https:\/\/www.theenergymix.com\/exxon-gas-deal-in-europe-undercuts-canadian-lng-exports\/\" target=\"_blank\" rel=\"noopener\">The Energy Mix<\/a> on Sept. 10, 2025.<\/em><\/p>\n<p><a href=\"https:\/\/www.theenergymix.com\/author\/mitchellbeer\/\" target=\"_blank\" rel=\"noopener\"><strong><em>By Mitchell Beer<\/em><\/strong><\/a><\/p>\n<p>An imminent deal that would see fossil fuel behemoth ExxonMobil sell gas to the European Union under a multi-decade contract would make it even less likely that Germany or any other EU country will need to import liquefied natural gas from Canada, an analyst says.<\/p>\n<p>The contract was announced Wednesday at the Gastech industry conference in Milan, where Exxon\u2019s senior VP of liquefied natural gas (LNG), Peter Clarke, said the project is \u201ccoming down the track\u201d on the continent that is \u201cthe most important market\u201d for U.S. LNG exports, the Financial Times\u00a0<a href=\"https:\/\/www.ft.com\/content\/45169ac4-c51c-4d03-8b77-c6155a0e1b44\">reported<\/a>\u00a0Wednesday.<\/p>\n<p>\u201cEU countries have until recently resisted multi-decade fossil fuel deals in order to protect climate goals, even after Moscow\u2019s full-scale invasion of Ukraine cut off the flow of Russian pipeline gas,\u201d the Times explains. \u201cThey preferred to compete with Asia for LNG cargoes on the spot market, often paying steep prices.\u201d<\/p>\n<p>The more recent policy shift \u201ccomes after heavy pressure from the U.S., with Energy Secretary Chris Wright on Monday saying Europe should\u00a0<a href=\"https:\/\/www.ft.com\/content\/22f9fa8c-4641-4d7f-ac3b-5c16cbac5128\">end all purchases of Russian gas<\/a>\u00a0if it wanted tougher American sanctions on Moscow,\u201d the news story adds.<\/p>\n<p>\u201cYou want to have secure energy suppliers that are your allies, not your foes,\u201d said Wright, who was last seen\u00a0<a href=\"https:\/\/www.nytimes.com\/2025\/09\/05\/climate\/wright-energy-offshore-wind-turbines.html\">claiming<\/a>\u00a0that climate change is \u201cnot incredibly important\u201d and it\u2019s \u201csilly\u201d to try to get greenhouse gas pollution under control.<\/p>\n<p>Even before this week\u2019s news, analysts were\u00a0<a href=\"https:\/\/www.theenergymix.com\/breaking-canada-pushes-for-lng-exports-to-germany-in-as-little-as-five-years\/\">projecting a drop<\/a>\u00a0in European gas consumption and raising doubts that countries will uphold Donald Trump\u2019s \u201c<a href=\"https:\/\/www.theenergymix.com\/delusional-pie-in-the-sky-u-s-eu-energy-deal-shows-trump-losing-in-global-trade-talks\/\">delusional<\/a>\u201d shakedown demand that the continent spend an extra $750 billion on U.S. oil and gas over the next three years to avoid punishing tariffs. Exxon\u2019s announcement puts any European market for Canadian gas that much farther out of reach, an analyst says.<\/p>\n<h2 class=\"wp-block-heading\">No New LNG from \u2018Any Source\u2019<\/h2>\n<p>\u201cEU gas demand is in terminal decline,\u201d despite a slight year-on-year increase in the first half of this year, Ana Maria Jaller-Makarewicz, lead energy analyst, Europe with the Institute for Energy Economics and Financial Analysis (IEEFA), told\u00a0<em>The Mix<\/em>\u00a0in an email. \u201cIf EU pipeline gas import volumes stay similar to this year, and if gas demand continues to decrease thanks to the\u00a0<a href=\"https:\/\/www.theenergymix.com\/eu-to-cut-russian-gas-use-65-this-year-as-analysts-urge-faster-shift-to-renewables\/\">REPowerEU<\/a>\u00a0policies, there will be no need for increased LNG imports from any source.\u201d<\/p>\n<p>It wasn\u2019t clear from the Times story whether Exxon was announcing a firm deal with an actual buyer, but Jaller-Makarewicz said those contracts will be harder to come by for anyone trying to sell into the EU.<\/p>\n<p>\u201cThe looming global LNG supply glut means exporters risk not finding buyers,\u201d she wrote. \u201cThey are under significant pressure to negotiate deals. The EU\u2019s LNG import volumes should be determined by the bloc\u2019s demand for the fuel, not by LNG suppliers\u2019 eagerness to sell.\u201d<\/p>\n<p>The Financial Times article mentioned as well that LNG imports by Asia, long touted as a mainstay of the global gas trade, have fallen in turn. Sam Reynolds, IEFFA\u2019s LNG\/Gas Research Lead, Asia, said a 5% drop in the continent\u2019s imports over the last eight months is \u201csignificant, because it demonstrates that consistent growth in Asia is anything but certain due to competition from cheaper energy resources like wind and solar, volatile LNG costs, weather conditions, and many other factors.\u201d<\/p>\n<p>So far this year, he wrote in an email, imports are down 18% in China, 15% in Thailand, 12% in Singapore, and 11% in India and Pakistan.<\/p>\n<p>The longer-term picture in Asia is more complicated, Reynolds said, with energy consumption still \u201cgrowing rapidly\u201d and countries taking a variety of approaches to the role of LNG. But what matters for would-be Canadian exporters is that \u201ca flood of new supply from competitors like Qatar and the United States is likely to result in oversupply,\u201d he wrote. \u201cMeanwhile, demand is shifting from the wealthy, creditworthy buyers like Japan, South Korea, and Europe to much more price-sensitive markets facing sizable barriers to LNG uptake.\u201d<\/p>\n<p>So \u201cexporting Canadian LNG into an oversupplied market amidst shifting demand presents a financial risk of lower prices and slimmer margins that ultimately dim the prospects for future Canadian LNG projects.\u201d<\/p>\n<h2 class=\"wp-block-heading\">Boosting Production as Gas Declines<\/h2>\n<p>Exxon\u2019s big Gastech reveal landed at about the same time the company was using its annual Global Outlook report to step up its attacks on what it cited as the European Union\u2019s \u201chigh-regulation, high-cost\u201d climate policies. The Times\u00a0<a href=\"https:\/\/www.ft.com\/content\/18335e6a-1ffd-4df2-8cd4-e5108da137b1\">identified<\/a>\u00a0oil, gas, and petrochemicals as industries that have levelled \u201cheavy criticism\u201d at the steps the EU is taking to bring its emissions to net-zero by 2050.<\/p>\n<p>\u201cUnder Europe\u2019s decarbonization approach: Industrial production, a critical sector in Europe\u2019s economy, is declining. Energy prices in heavy industry and commercial transportation are rising,\u201d the document stated. \u201cAs a result, public support for lower emissions technology needed to reach EU climate goals is wavering.\u201d<\/p>\n<p>Chris Birdsall, director of Exxon\u2019s economics and energy division, told media that countries were mistaken to follow the mounting evidence that the transition off fossil fuels will deliver more affordable energy.<\/p>\n<p>\u201cI don\u2019t want it to come across as\u2026 the energy transition can\u2019t happen or shouldn\u2019t happen,\u201d he said. \u201cOur point is, you need to be smart about it.\u201d<\/p>\n<p>The same outlook report projected global natural gas demand growing more than 20% from 2024 levels by 2050, with gas replacing coal while electricity use in developing countries rises. \u201cThe projections provide the basis for the top U.S. oil producer\u2019s long-term strategy and investment,\u201d Reuters wrote. \u201cExxon has ambitious growth plans\u00a0<a href=\"https:\/\/www.reuters.com\/markets\/europe\/shell-ups-shareholder-distributions-cuts-spending-2025-03-25\/\">compared<\/a>\u00a0to other global oil players, with a target to\u00a0<a href=\"https:\/\/www.reuters.com\/business\/energy\/exxon-mobil-forecasts-higher-capital-spending-2024-12-11\/\">boost production by 18%<\/a>\u00a0over the next five years.\u201d<\/p>\n<p>But Exxon is increasingly isolated in that assumption, with the International Energy Agency projecting\u00a0<a href=\"https:\/\/www.theenergymix.com\/its-the-end-of-oil-blockbuster-iea-report-urges-no-new-fossil-development\/\">since 2021<\/a>\u00a0that global demand for all three fossil fuels will peak this decade, then go into permanent decline as countries\u00a0<a href=\"https:\/\/www.theenergymix.com\/exxon-gas-deal-in-europe-undercuts-canadian-lng-exports\/The%20projections%20provide%20the%20basis%20for%20the%20top%20U.S.%20oil%20producer's%20long-term%20strategy%20and%20investment.%20Exxon%20has%20ambitious%20growth%20plans%20compared%20to%20other%20global%20oil%20players,%20with%20a%20target%20to%20boost%20production%20by%2018%25%20over%20the%20next%20five%20years.\">tap into an abundance<\/a>\u00a0of affordable renewable energy. Late last year, the Ember energy think tank\u00a0<a href=\"https:\/\/www.theenergymix.com\/fossil-fuel-generation-peaking-but-corporate-backtracking-threatens-climate-goals\/\">reported<\/a>\u00a0that 107 of the world\u2019s economies are already past peak fossil fuel use and replacing oil, gas, and coal with renewables.<\/p>\n<p>For gas in particular, analysts are projecting a global supply glut beginning in not very many months.<\/p>\n<p>In Western Europe, \u201cin the medium and long term, we\u2019re not anticipating an increase in gas demand,\u201d Pawel Czyzak, Ember\u2019s Europe programme director,\u00a0<a href=\"https:\/\/www.theenergymix.com\/lng-export-push-depends-on-future-eu-gas-demand-exploratory-discussions-with-buyers\/\">told<\/a>\u00a0<em>The Mix\u00a0<\/em>in an email late last month. EU gas demand fell 17% between 2021 and 2024, he said, spurred largely by the energy shock following Russian President Vladimir Putin\u2019s invasion of Ukraine, and consumption will continue to shrink through 2030 as Europe electrifies its economy.<\/p>\n<p>That means the continent \u201cis already heavily oversupplied towards 2030,\u201d he said, and \u201cthat oversupply will get even more severe if the\u00a0<a href=\"https:\/\/www.theenergymix.com\/delusional-pie-in-the-sky-u-s-eu-energy-deal-shows-trump-losing-in-global-trade-talks\/\" target=\"_blank\" rel=\"noreferrer noopener\">questionable fossil fuel imports<\/a>\u00a0from the EU-U.S. trade [and tariff deal] are implemented.\u201d<\/p>\n<p>At that time, Jaller-Makarewicz said the EU was\u00a0<a href=\"https:\/\/ieefa.org\/resources\/eu-gas-imports-fall-25-2030-demand-reduction-target-exceeded-once-again\">on track<\/a>\u00a0to reduce its gas imports 25% by 2030 under REPowerEU, its strategy to end its dependency on Russian fossil fuels by 2027 through increased energy efficiency, faster growth in renewable energy, and diversified energy supplies. The plan\u00a0<a href=\"https:\/\/www.consilium.europa.eu\/en\/press\/press-releases\/2024\/03\/04\/security-of-gas-supply-member-states-agree-on-recommendation-to-continue-voluntary-demand-reduction-measures\/#:~:text=Extended%20period%20for%20voluntary%20demand,2017%20to%2031%20March%202022.\">included<\/a>\u00a0voluntary gas reduction targets for 2022, 2023, and 2024, and the bloc exceeded its targets for the first two years, though Jaller-Makarewicz\u00a0<a href=\"https:\/\/ieefa.org\/resources\/two-years-repowereu-gas-reduction-track-latest-target-raises-risks\">warned<\/a>\u00a0in a May, 2024 commentary that EU targets for 2024 and 2025 could allow for increased gas use.<\/p>\n<h2 class=\"wp-block-heading\">(Back) To Russia With Love<\/h2>\n<p>But Russia is getting a boost from none other than ExxonMobil. Late last month, the Wall Street Journal and the Reuters news agency issued more or less simultaneous, exclusive reports that Exxon had held secret talks with state-controlled fossil company Rosneft about re-establishing its operations in Russia if the country signs a peace deal with Ukraine.<\/p>\n<p>Some of those conversations took place when Donald Trump and Putin met for a negotiating session in Alaska in mid-August.<\/p>\n<p>\u201cAfter huddling with President Trump in Alaska, President Vladimir Putin told reporters Russia and the U.S. could do more business together\u2014for example, between their Pacific coastlines,\u201d the WSJ\u00a0<a href=\"https:\/\/www.wsj.com\/business\/energy-oil\/exxon-rosneft-russia-oil-talks-f524e81f\">reported<\/a>\u00a0August 26. Trump\u2019s reply: \u201cWe look forward to dealing.\u201d<\/p>\n<p>But \u201cwhat the two leaders didn\u2019t say: Behind closed doors, their countries\u2019 biggest energy companies had already sketched out a roadmap to going back into business, pumping oil and gas fields off Russia\u2019s far-east coast.\u201d<\/p>\n<p>Reuters\u00a0<a href=\"https:\/\/www.reuters.com\/business\/energy\/us-russian-officials-discussed-energy-deals-alongside-latest-ukraine-peace-talks-2025-08-26\/\">said<\/a>\u00a0those projects \u201cwere put forward as incentives to encourage the Kremlin to agree to peace in Ukraine and for Washington to ease sanctions on Russia.\u201d Since it invaded Ukraine in 2022, Russia has faced severe international restrictions on energy sector investment and major export deals.<\/p>\n<p>Exxon had exited Russia in October 2022, Reuters\u00a0<a href=\"https:\/\/www.reuters.com\/business\/energy\/exclusive-exxon-exits-russia-empty-handed-with-oil-project-unilaterally-2022-10-17\/\">reported<\/a>\u00a0at the time, leaving behind assets in the Sakhalin-1 oil and gas field valued at more than $4 billion. \u201cWe made every effort to engage with the Russian government and other stakeholders,\u201d an Exxon spokesperson said, before the Russian government \u201cunilaterally terminated\u201d its interest in the project.<\/p>\n<p>\u201cIts departure illustrates the clash between the West and Russia over energy following Moscow\u2019s invasion of Ukraine in late February and threats of using nuclear weapons against the country and its supporters,\u201d Reuters wrote. \u201cBP, Total\u00c9nergies, Equinor, and Shell have all transferred properties to Russian partners or left operations behind.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"<div class=\"mh-excerpt\"><p>This article was published by The Energy Mix on Sept. 10, 2025. By Mitchell Beer An imminent deal that would see fossil fuel behemoth ExxonMobil sell gas to the European Union under a multi-decade contract <a class=\"mh-excerpt-more\" href=\"https:\/\/energi.media\/news\/exxon-gas-deal-in-europe-undercuts-canadian-lng-exports\/\" title=\"Exxon gas deal in Europe undercuts Canadian LNG exports\">[Read more]<\/a><\/p>\n<\/div>","protected":false},"author":6,"featured_media":67039,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"give_campaign_id":0,"footnotes":""},"categories":[1],"tags":[13,41,14,95,224,272,584,2445,598],"class_list":{"0":"post-67038","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-news","8":"tag-canada","9":"tag-energy","10":"tag-featured","11":"tag-fossil-fuels","12":"tag-lng","13":"tag-russia","14":"tag-trump","15":"tag-ukraine","16":"tag-us"},"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - 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