Chevron Targets European LNG Market as Gas Demand Surges

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(Bloomberg) Chevron Corp. is developing its liquefied natural gas business, with a new focus on Europe where nations are rapidly embracing the fuel as they seek to free themselves from dependence on Russian energy.

The US major is increasing gas production and exploring ways to deliver more of the fuel to Europe as Russia curtails shipments. The strategy involves harnessing assets that target Europe, such as fields in Israel, and utilizing contracts purchasing US LNG, said Colin Parfitt, vice president for midstream at Chevron.Chevron in June signed deals to buy LNG from US developers Venture Global LNG Inc. and Cheniere Energy Inc., opening up new markets. Chevron already has a significant presence in Asia’s LNG market, supplying customers such as Japan and South Korea from its Gorgon project in Australia.

“We have been mostly focused on Asia because that’s where our assets are, and now we are focused much more globally, because we are adding assets that fit much better to meet demand into Europe,” Parfitt said in an interview at the Gastech conference in Milan. Chevron also has a role in the Angola LNG Project and operations in Equatorial Guinea.

Europe is in the grip of the worst energy crisis in decades, with gas and electricity prices reaching record levels and pushing up bills for households and industries, and bringing risks of recession and social unrest.

Executives from US LNG producers and suppliers have flocked to Gastech to meet with European buyers eager to hash out deals to bring more supply to the continent. Chevron is having talks with companies “from all over Europe,” Parfitt said. He declined to elaborate on whether the company would seek further contracts to take US LNG.

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Chevron is also building its gas trading activities in London, Singapore and Houston as it adds more staff, he said.

The company, which is active in gas production in Israel, is looking at how to expand output there, and supply the fuel to neighboring markets or convert it into LNG and send it to Europe. Floating LNG production is an option, Parfitt said.

“Then you open up world markets,” he said. “That opens up Europe for us.”