By Germán Toro Ghio, www.germantoroghio.com
Karlstad, Sweden, July 30, 2025
#EnergyGeopolitics #ESGInvestmentFailure #ChineseEnergyDominance #ClimateCapitalism
When President Trump and European Commission President Ursula von der Leyen unveiled a new trade framework on July 27, 2025, it included a jaw‑dropping commitment: Europe would purchase $750 billion of U.S. energy—primarily liquefied natural gas (LNG) and oil—over the next three years, or roughly $250 billion annually. Yet within days, energy analysts and port operators were scratching their heads. How could Europe absorb such volumes through its handful of regasification terminals and nascent LNG ports? The pledge may serve geopolitical goals—weakening Moscow’s grip on European gas supplies—but logistically, it verges on fantasy. (Axios)(Axios)
1. The Geopolitical Backdrop: From Russian Pipes to American Ships
Before 2022, roughly 40 percent of the EU’s gas came directly via Russian pipelines, chiefly Nord Stream, Yamal–Europe, and the Ukraine transit routes. After Russia’s full‑scale invasion of Ukraine, Brussels and member states rushed to diversify. By early 2023, European imports of U.S. LNG had surged, making the United States Europe’s top non-Russian supplier. Yet even with this uptick, EU–U.S. LNG trade in 2024 stood at only $80 billion, barely a third of the pledged annual target. (wsj.com)(Axios)
Despite a flurry of new regasification capacity, Europe still depends heavily on pipeline gas from Norway (≈ 35 bcm/year), Algeria (≈ 30 bcm/year), and Azerbaijan (via TANAP/TAP, ≈ 10 bcm/year). In contrast, total EU regasification capacity in mid‑2025 was about 250 bcm/year—enough to import ≈ $60–70 billion of U.S. LNG at current prices [$10–12/MMBtu]—far short of the $250 billion mark. (Energy Central)
2. “Few Ports, Big Promises”: Europe’s Existing LNG Terminals
2.1 Wilhelmshaven and Germany’s Baltic Push
Wilhelmshaven: Germany’s first onshore LNG terminal came online in November 2022. Its two storage tanks can hold 380,000 m³ and regasify up to 8 bcm/year. However, in Q1 2025 it ran at just 49 percent utilization due to regulatory slowdowns in pipeline interconnectors. (Reuters)
Brunsbüttel: Operational since late 2023, this FSRU‑based terminal adds another 10 bcm/year but has seen 83 percent utilization—far higher, thanks to flexible vessel charters that bypass onshore approvals. (Reuters)
Mukran: The Baltic port’s onshore facility languished at 5 percent capacity in Q1 2025, feeding only 1.3 bcm into the grid—1.5 percent of Germany’s annual demand. Local opposition and “take‑or‑pay” contracts have kept it afloat, but actual throughput remains negligible. (Reuters)
2.2 Finland’s Inkoo FSRU
Inkoo (Hanko): Finland’s floating storage and regasification unit began operations in January 2023, offering 5 bcm/year capacity. It reserves space through competitive auctions, but market demand has been muted, with winter bookings often retracted. (Gasgrid)(Global Energy Monitor)
2.3 Poland’s Świnoujście Expansion
Świnoujście: Since 2015 it has provided 5 bcm/year; after its June 2023 expansion (third 180,000 m³ tank), capacity rose to 7.5 bcm/year (≈ €2 billion investment) to satisfy about 50 percent of Poland’s gas needs. Yet connectivity constraints to Germany and the Czech Republic have capped throughput. (giignl.org)
2.4 Greece’s Alexandroupolis FSRU
Alexandroupolis: Offshore since October 2024, this 5.5 bcm/year FSRU links via a 28 km undersea pipeline to Komotini, serving Bulgaria, Romania, Serbia, Hungary, and Ukraine. Despite its strategic value, annual utilization hovers around 4 bcm due to competition from cheaper Greek pipeline imports. (Reuters)
3. REPowerEU and the Pipeline to Nowhere
In May 2022, the European Commission launched REPowerEU, a €300 billion plan to reduce Russian fuel use by two-thirds by 2027. The LNG pillar includes:
24 new onshore and FSRU projects (2022–2027), adding ≈ 150 bcm/year of potential capacity.
Expansion of existing terminals in Spain, Belgium (Zeebrugge), the Netherlands (Rotterdam), and France (Fos‑Cavaou).
Interconnector upgrades (e.g., Baltic Pipe Poland‑Denmark; 10 bcm/year by late 2022).
Yet CEER’s February 2024 report warns that only 65 percent of planned capacity will materialize by 2027, thanks to permitting delays, contractor bottlenecks, and public opposition near coastal zones. (ceer.eu)
Meanwhile, pipelines like Nord Stream 2 remain politically frozen, and new projects (e.g., Poseidon in the Eastern Med) stall amid environmental and legal challenges. Europe’s energy map is dotted with half‑built terminals and under‑used interconnectors—hardly the backbone for a $250 billion‑a‑year import spree. (ceer.eu)
4. The Economic Chasm: CAPEX, OPEX, and the Real Cost of LNG
4.1 Liquefaction and Shipping
Liquefaction plants consume 10–15 percent of the gas they process, at costs of $3–4/MMBtu.
Carrier charters average $50,000–100,000/day; at 1 million m³ per voyage, this adds $2–3/MMBtu.
Boil‑off losses and reliquefaction onboard can add another $0.50–1/MMBtu.
Thus, delivered ex‑ship cost to Europe averages $15–18/MMBtu, up from $8–10 for major pipelines from Norway. This differential alone, multiplied by hundreds of bcm, equates to tens of billions of extra dollars annually—yet the $750 billion pledge contains no mechanism for cost caps or subsidies. (Axios)
4.2 Regasification Fees and Domestic Transport
Regas tariffs range from €0.7–1.5/MMBtu depending on the terminal and country.
Pipeline network levies add €0.3–0.5/MMBtu to move gas to consumption centres.
Europe’s average landed cost thus approaches $20–22/MMBtu, outpricing pipeline supplies and undermining competitiveness for industry, power generation, and heating—especially as renewables drive wholesale prices lower. (wsj.com)
5. A Fragmented Market: Who Will Buy All This Gas?
Europe’s energy markets are highly decentralized. National regulators set tariffs, but private utilities and traders negotiate the bulk of LNG contracts. There is no single EU “buyer of last resort.” The $750 billion commitment rests on voluntary offtakes by dozens of companies—unlike China’s state‑led Phase 1 deals in 2019, which achieved more secure purchase obligations. (reddit.com)
Attempts at joint procurement (e.g., EU gas purchase platform announced June 2023) have foundered on legal and competition objections. Without take‑or‑pay guarantees at scale, sellers (U.S. exporters) have little incentive to invest in additional liquefaction trains or dedicated shipping capacity. (Axios)
References (Part 1)
“EU trade deal with Trump seen as helping Europe ditch Russian fuels,” Axios, Jul 27, 2025. (Axios)
“The new trade deal that President Trump unveiled… includes a European pledge to buy $750 billion…,” Axios Energy & Climate, Jul 28, 2025. (Axios)
“Świnoujście LNG terminal,” Wikipedia, last updated Jul 2025. (en.wikipedia.org)
“Poland’s Gaz‑System wraps up Świnoujście LNG terminal expansion,” GIIGNL, Jul 2025. (giignl.org)
“LNG terminal off northern Greece diversifies gas routes to Europe,” Reuters, Oct 1, 2024. (Reuters)
“Germany’s Mukran LNG terminal at 5% utilisation in Q1, says DUH,” Reuters, Apr 7, 2025. (Reuters)
“Inkoo LNG Terminal Preliminary schedule for winter 2023/2024,” Gasgrid.fi, Oct 2023. (Gasgrid)
“Investors Aren’t Buying EU Pledge For $750 Billion Energy‑Buying Bonanza,” Wall Street Journal, Jul 28, 2025. (wsj.com)
“The influence of new LNG terminals on the future EU energy market,” CEER, Feb 2024. (ceer.eu)
“EPA’s climate flip,” Axios newsletter, Jul 29, 2025. (Axios)
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