Financing a Challenge to European Imports of U.S. LNG

Bloomberg reports that Andree Stracke, chief commercial officer at German company RWE AG’s trading unit, says that one of the challenges in getting U.S. LNG to Europe is a lack of financing. RWE AG is Germany’s biggest power producer which signed two contracts for U.S. LNG supply this year. According to the report, “to minimize price risk, lenders to U.S. projects typically require sales of future production to be based on Henry Hub, the U.S. gas benchmark. But European buyers want rates linked to their markets.” U.S. banks apparently will not lend against European gas prices.

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