The U.S. and European Union announced an agreement to try and boost the supply of liquefied natural gas to European countries by the end of 2022 with at least 15 billion cubic meters.
The aim is to work with international partners to help the continent wean itself off Russian fuel imports. Under the agreement, E.U. member states will work to ensure demand for 50 billion cubic meters of U.S. liquefied natural gas until at least 2030. LNG imports from Russia stood at around 14 billion to 18 billion cubic meters annually in the past years.
President Joe Biden and European Commission President Ursula von der Leyen will announce the pact—which includes the formation of a joint task force—ahead of an appearance together in Brussels following Biden’s meetings Thursday with NATO, the Group of Seven and E.U. leaders.
In Berlin, Germany unveiled its own plan to dramatically reduce Russian fossil fuel imports and make the country almost completely independent of Russian gas by the middle of 2024. Currently, European buyers are competing with Asian countries for the world’s limited supply of LNG cargoes.
The issue is critical as Russia is the E.U.’s biggest natural gas supplier, accounting for more than 40% of imports. The E.U. also relies on the country for the biggest share of its coal and oil imports, and has struggled to shift its energy policy away from Moscow.
However, the aspirational pact is light on detail, and the U.S. did not immediately say which partners it would source new shipments from or by when—suggesting that final agreements aren’t yet in place with suppliers.
The primary goals of the joint task force—which will be chaired by a representative each from the White House and the European Commission—will be to diversity LNG supplies in line with efforts to combat climate change and to cut demand for natural gas.
It will “work to ensure energy security for Ukraine and the E.U. in preparation for next winter and the following one while supporting the E.U.’s goal to end its dependence on Russian fossil fuels,” according to a white House fact sheet.
The 27-nation bloc is aiming to replace this year nearly two-thirds of its total gas imports from Russia, which amounted to 155 billion cubic meters last year, after the war waged by President Vladimir Putin forced an unprecedented re-think of the bloc’s energy strategy.
The additional imports from the U.S. will take time to start, with Europe constrained by the current regassification capacity, number of terminals and interconnectors, according to an E.U. official, who asked not to be identified commenting on private talks
The transatlantic agreement comes ahead of a planned meeting in Berlin next week between American gas exporters and German buyers of the power-plant fuel. The U.S. Embassy in Germany is coordinating the meeting with the liquefied natural gas suppliers, expected to take place after the March 29-30 Berlin Energy Transition Dialogue conference, according to people familiar with the plan.
The new European energy strategy, outlined by the commission earlier this month, aims to replace 101.5 billion cubic meters of Russian gas in 2022 by tapping alternative supply sources, building up renewables and boosting energy security. It seeks to ensure 50 billion cubic meters in LNG from new suppliers.
Imports of the fuel from the U.S. have risen exponentially amid the European energy crisis, which started a couple of months before the war amid limited flows from Russia. In 2021, transatlantic deliveries of LNG were at around 22 billion cubic meters. In January 2022, they stood at 4.4 billion cubic meters.
—With assistance from Ewa Krukowska, Alberto Nardelli and Arne Delfs.
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