Europe’s Reliance on US LNG: Prices, Contracts and Supplier Risk

How dependent is Europe on US LNG?

Europe's imports of US liquefied natural gas (LNG) have more than tripled since 2021, and the US share of European LNG imports has climbed with them. The Institute for Energy Economics and Financial Analysis (IEEFA) estimates that Europe imported 99.5 billion cubic metres (bcm) of US LNG in 2025, against 29.8 bcm in 2021, as buyers replaced Russian pipeline gas ^[1]. The European Commission's quarterly gas market report puts EU LNG imports at 131 bcm in 2025, up 29% on 2024. The US share of those imports rose from 45% to 58% ^[2].

Counting pipeline gas as well, the US supplied about 26% of EU gas imports in 2025 (76 bcm), behind Norway at 30% (89 bcm) ^[2]. The dependence also runs the other way. The US Energy Information Administration (EIA) says Europe took a record 10.3 billion cubic feet per day (Bcf/d) of US LNG in 2025, or 68% of US export volumes ^[3].

The concentration has deepened in 2026. IEEFA's tracker shows the US supplying 63% of Europe's LNG imports in the first quarter, up from 57% a year earlier. IEEFA expects the US to provide about two-thirds of Europe's LNG in 2026 and to overtake Norway as Europe's largest gas supplier. It says the US share of EU LNG imports could reach 80% by 2028 ^[4].

Kpler data cited by Reuters showed Europe on course for record February imports of about 14.20 million tonnes, 57% of them from the US ^[5]. An Attaqa report cited by Egypt Oil & Gas put the US share at nearly two-thirds in the third quarter, although Europe's total LNG imports fell 13% year on year ^[6]. Datasets differ in coverage, so shares are not strictly comparable.

Why is the US share still rising?

Two other suppliers are shrinking. Qatar's share of Europe's LNG imports fell to 6% in the first quarter of 2026. IEEFA says a missile attack on the Ras Laffan complex in March knocked out 17% of Qatar's annual export capacity for as long as five years ^[1]. Our analysis of LNG, gas prices and urea covers the wider effects.

Russian LNG is being phased out by law. Under the rules agreed by the Council and the European Parliament in December 2025, imports under short-term contracts concluded before 17 June 2025 are banned from 25 April 2026, and those under long-term LNG contracts from 1 January 2027 ^[7]. Russia still held 13% of Europe's LNG imports in the first quarter, and EU imports of Russian LNG rose 16% year on year to a quarterly record ^[1,4]. Nigeria, which overtook Qatar and Algeria as Europe's third-largest LNG supplier in the first quarter, is one alternative, though on a far smaller scale ^[1].

How are US LNG cargoes contracted and priced?

US liquefaction trains are typically financed against 20-year sale and purchase agreements (SPAs) ^[10] that price gas off the Henry Hub benchmark rather than oil. The Oxford Institute for Energy Studies (OIES) uses a standard formula of 115% of Henry Hub plus a $3/MMBtu tolling fee for liquefaction, with shipping and regasification costs on top ^[8]. Fees vary by deal: the pioneering 2011 Cheniere–BG Group contract for Sabine Pass was priced at $2.25/MMBtu ^[9].

Two features matter for European buyers. First, the fixed fee is a sunk cost: when spot prices collapsed in 2020, buyers cancelled up to 80 cargoes for June and July loading but still owed the fixed charges ^[9]. Second, the US industry pioneered destination-free contracts ^[9]. Cargoes are bought free on board (FOB), so the buyer can send them wherever they earn most but cannot change how much the plant produces, making US LNG a swing in destination rather than volume ^[10].

The gap between US and European prices is currently wide. The EIA forecasts that Henry Hub will average $3.48/MMBtu in 2026 and $3.16/MMBtu in 2027 ^[11]. On the OIES formula, the 2026 forecast implies about $7/MMBtu at the US terminal before shipping and regasification (our calculation). In Europe, front-month Title Transfer Facility (TTF) gas rose to €95.73/MWh on 26 October, more than $30/MMBtu and the highest since 2022 ^[12]. Even so, IEEFA finds US LNG is, on average, the most expensive for European buyers ^[4].

Destination flexibility cuts both ways

Flexible contracts helped Europe draw in US cargoes after 2022 ^[1]; in 2026 they are pulling cargoes east. In the first half, US LNG exports rose 23% to 17.4 Bcf/d. Shipments to Asia rose by 2.3 Bcf/d (108%), helped by the Hormuz disruption, while exports to Europe rose by only 0.1 Bcf/d (1%) ^[13].

OIES reports that European LNG demand fell 17% quarter on quarter in the third quarter, with Europe "in effect yielding volumes to Asia in place of storage injection" ^[8]. EU storage was 74.62% full on 25 October, against a five-year average of about 86% for the time of year ^[12]. Being the largest buyer of US LNG does not guarantee supply: Europe has to compete with Asia on price.

New US capacity: Plaquemines, Corpus Christi and Golden Pass

The EIA says Plaquemines LNG is exporting at full capacity. Golden Pass began exporting in April 2026; its first train (0.7 Bcf/d) should ramp up by the end of the year, and a second is due in late 2026 ^[13]. OIES says the Corpus Christi Stage 3 expansion was completed in August, while Golden Pass loaded only about one cargo a month in the third quarter ^[8]. Once complete, the three projects add 4.0 Bcf/d of nominal capacity ^[13].

The next wave is due in 2027. The EIA expects Port Arthur LNG Phase 1 (1.6 Bcf/d), Rio Grande LNG trains 1 and 2 (1.4 Bcf/d) and Golden Pass's final train (0.7 Bcf/d) to start that year ^[3]. Its October Short-Term Energy Outlook forecasts US LNG exports of 17.6 Bcf/d in 2026 and 18.6 Bcf/d in 2027 ^[11].

What did the EU–US trade deal say about energy?

After a framework trade deal in July 2025, the EU–US joint statement of 21 August 2025 said the EU intends to buy US LNG, oil and nuclear energy products with an expected value of $750 billion through 2028, or about $250 billion a year ^[14]. The German Marshall Fund (GMF) reads the figure as a ceiling rather than a binding target ^[14].

Analysts questioned the scale from the start. Kpler estimated EU imports of US oil, LNG, LPG and coal at about $80.5 billion in 2024, including roughly $20 billion of LNG, and described the commitment as "unrealistic under current market conditions", noting that the EU cannot legally require companies to buy US oil or LNG ^[15]. The value also depends on prices. The Financial Times, as reported by Komersant, found that EU spending on US oil and gas fell by about 7% over the last four months of 2025, even though volumes rose, because global prices were lower ^[16].

What are the risks of relying on one supplier?

The main risks of concentration are:

• Policy risk. US LNG exports need federal approval. GMF notes that future administrations could change course and that rising US power prices could keep more gas at home ^[14].
• Commercial risk. Cargoes follow price, and GMF cites an arbitration case that Venture Global lost to BP as a possible drag on confidence in US suppliers ^[14].
• Operational risk. Planned maintenance took two of Freeport LNG's three trains offline in July and August, and Sabine Pass had feedstock and shipping problems in the third quarter ^[8].
• Over-investment risk. IEEFA expects European LNG demand to fall about 23% between 2025 and 2030, which could leave new terminals under-used. Its analyst Ana Maria Jaller-Makarewicz said "LNG has become the Achilles' heel of Europe's energy security strategy" ^[4].

Diversification options exist but mostly arrive later. Qatar's North Field East expansion had targeted its first train for the first half of 2027, but OIES says the shutdown of most Qatari liquefaction puts that timing in question ^[8]. In Canada, LNG Canada approved its second phase on 28 September, doubling capacity to 28 million tonnes a year in the early 2030s. The 12-million-tonne Ksi Lisims floating project has sales contracts with Asian and European buyers and aims for a final investment decision by the end of 2026 ^[8]. In Mozambique, the Rovuma LNG project is still targeting a final investment decision later this year ^[8].

What to watch

The near-term question is whether Europe can attract enough US cargoes this winter while Asia bids for the same supply. Other markers are the Golden Pass ramp-up, the 2027 start-ups at Port Arthur and Rio Grande, the 1 January 2027 ban on Russian LNG under long-term contracts and the timing of any Qatari restart. A softer Henry Hub in 2027, as the EIA expects ^[11], would lower the cost of US cargoes but not Europe's reliance on them.

Alupetra follows LNG supply and pricing from its offices in Istanbul, London and Dubai.