Top LNG supplier to Europe warns this winter 'could be really, really tight' amid global supply crunch

• The biggest US exporter of liquefied natural gas warned that limited supplies worldwide mean this winter "could be really, really tight."
• Cheniere, which has sent 70% of its production to Europe this year, said a resurgence in Chinese LNG demand would worsen the energy crisis.

The biggest US exporter of liquefied natural gas warned that limited supplies worldwide mean this winter "could be really, really tight."

Cheniere, which has sent 70% of its output to Europe this year, also said a resurgence in Chinese LNG demand would worsen the energy crisis in Europe, where natural gas deliveries from Russia's Nord Stream pipeline remain cut off.

"At the end of the day, what's going to decide how tight the market will be is how cold it is and how government policies, industry rationing work," Corey Grindal, Cheniere's executive vice president for worldwide trading, told Reuters.

For now, the current price environment indicates LNG supplies will continue to go to Europe, he added.

Prices were $2 per million British thermal unit in 2020 and have soared 2,750% to $57 per million BTUs in August.

The US has taken advantage of elevated prices in Europe thanks to Russia's invasion of Ukraine this year, and has stepped up exports of the super-chilled fuel.

China is also sending LNG to Europe as zero-COVID policies are still weighing on domestic demand. Traders told Bloomberg that major shippers including Sinopec and PetroChina Co have sold shipments of LNG to to struggling European nations throughout the year.

Meanwhile, both the European Union and the UK are seeking to cap gas prices and trying to curb consumption. But a total Russian gas shutoff would send Europe into an energy crisis that would last multiple winters, according to RBC's global commodity chief Helima Croft.