Remarks of Assistant Secretary for Fossil Energy Steven Winberg as prepared at the Small-Scale LNG Deployment in Central and Eastern Workshop in Tirana, Albania on February 5, 2020.
Good morning. On behalf of the U.S. Department of Energy, it’s an honor to be here in Tirana today to discuss the role that LNG can play in diversifying Albania’s energy mix and strengthening Albanian energy security.
Before I begin, I’d like to thank Minister Balluku for her warm welcome and for her leadership in the effort to achieve energy diversity and security for the Albanian people.
I also want to thank Ambassador Kim for her remarks and congratulate her on the new appointment as America’s representative here in Albania. I have no doubt she will be a tremendous asset to our friends here.
And I thank all of you for being here today, and for taking part in what I hope will be an important step toward Albanian energy security – and toward closer energy ties between my country and yours.
As President Trump has said, “U.S. energy exports provide true energy security to our friends, partners, and allies all across the globe.” And that commitment to the energy security of our partners around the world is one of the key drivers of our global energy engagement through initiatives like the Partnership for Transatlantic Energy Cooperation.
So, we want our friends and partners in Albania, as well as the rest of the Balkans, Central and Eastern Europe, and Europe more broadly, to know that they can count on the United States as a stable, reliable energy partner as they move toward to energy security and diversity.
And here in Albania, you are making impressive strides in that direction, especially through reforms to modernize power distribution, transmission, and generation. At the same time, the Trans Adriatic Pipeline holds great potential for countries in the Southern Gas Corridor – including Albania. And it highlights the potential of natural gas to increase Albanian energy security and access to energy, and to reduce energy costs.
America is uniquely poised to help you realize that potential – and that’s particularly true when it comes to natural gas supplies.
Today, America is the world’s top oil and natural gas producer. And because of that abundance, we’re one of the world’s top three LNG exporters.
To date, U.S. LNG has landed in nearly 40 destinations on 5 continents. We’re now exporting two cargoes of LNG nearly every day – enough to support the daily combined natural gas needs of up to a half dozen European countries. And since mid-2018, our LNG exports to Europe have risen nearly 600 percent. In fact, through November 2019, a third of our LNG exports last year went to Europe – and they’re providing much needed security and diversity of energy supply for our European partners.
I think it’s also important to note that our National Energy Technology Laboratory recently updated a life cycle analysis of greenhouse gas emissions associated with U.S. LNG exports for power production in European markets. And that study found that U.S. LNG exports can provide a cleaner source of power generation here in Europe.
Now, one reason that our LNG is attractive to importers is that they know that they can rely on the rule of law and the sanctity of contracts when doing business with the United States.
Another reason is that the U.S. has a transparent market, aided by an extensive pipeline system that can transport natural gas nearly anywhere in America – plus a vibrant spot market for natural gas deliveries.
And U.S. LNG contracts are among the most flexible on the global market.
And speaking of flexibility, LNG is a versatile fuel. In its liquid state, LNG is a highly cost-competitive substitute for refined oil products in a variety of sectors, including industrial, commercial, transport, and even power generation.
Once turned back into gas at regasification terminals and delivered to end-users by pipeline, LNG functions the same as any other source of gas for the same sorts of applications.
Because of this flexibility and versatility, the global LNG market is growing very rapidly and completely changing the energy landscape here in Europe and around the world. This is true for large, bulk cargoes and for small-scale containers.
The industry term for this small-scale container trade is Small-Scale LNG, and it may be an attractive import option for Albania and other countries in the region. So, I’d like to focus on this option for a few moments.
In the U.S., we are seeing strong interest in Small-Scale LNG. This is true not only for our domestic market but also for our exports, which in turn, present an opportunity for customers globally – especially in markets where demand for natural gas is not great enough to support the economies of scale required to justify large volumes of LNG imports via conventional LNG tankers. Several terminals in the U.S. have been exclusively exporting small-scale cargoes to Caribbean nations.
The question is –will this region be next? There are some very good reasons why it should be.
First and foremost, Small-Scale LNG can meet demand needs here in Albania and beyond with limited infrastructure investment. You do not need to build a regasification terminal or gas pipeline network in Albania to connect to the global LNG market.
In essence, there is an opportunity to build a “virtual pipeline” network for gas to address critical energy security vulnerabilities. I understand that the CEO of Albgaz has been very excited about the commercial possibilities of building “virtual pipelines” – using trucks to deliver LNG in containers from a distribution point to customers in Albania and possibly Kosovo too. And small-scale LNG can play a critical role in those “virtual pipelines.”
There is also a real opportunity for Albania to realize cost savings with LNG, especially if you have an anchor customer like the Vlora thermal power plant that could act as a distribution point for your country and your neighbors. An anchor would allow cost savings throughout the supply chain, the conversion of diesel vehicles to run on Compressed Natural Gas would eliminate the price sensitivity of diesel and drive down transport costs.
So, we believe that small-scale LNG has the potential to provide tremendous benefits for Albanian energy security and diversity, and we’ve been cooperating with Albanian officials through P-TEC’s Security of Energy Supply Working Group to analyze the potential cost-effective uses of LNG in Albania.
As a part of that effort, the U.S. Energy Association, the Gas Technology Institute, and ADI Analytics will prepare a first-of-its kind technical and policy study to fully understand the potential near-term benefits of small-scale LNG in this region. The study will examine regional infrastructure needs required to enable containerized LNG distribution, as well as potential commercial opportunities associated with small-scale LNG.
This workshop is designed to gather critical information from regional leaders and experts that will inform the study – which can then ultimately help you make informed policy and commercial decisions regarding the use of LNG here in Albania.
So, I look forward to the presentations and discussions today. And we welcome the opportunity to work with you to strengthen your energy security and diversity.