Global LNG Deals Add Competition for Bakken Natural Gas in Europe

New liquefied natural gas (LNG) supply deals announced Monday are set to increase competition for U.S. gas exports, including production from North Dakota's Bakken formation, in the key European market.

Malaysian state-owned Petronas agreed to supply LNG to Greek energy company Metlen, according to Rigzone. The gas will be sold by Metlen in Greece and neighboring Southeast European countries. Separately, Ukraine's state-owned Naftogaz signed a memorandum of understanding with Canada's Kino Aski LNG for potential long-term LNG supply from a proposed Canadian project to Europe, Rigzone also reported.

These developments underscore the ongoing global race to secure stable, non-Russian natural gas supplies for Europe. Since the war in Ukraine began, U.S. LNG exports have surged to help fill the continent's energy gap. Bakken operators have benefited indirectly from this elevated global demand, which supports stronger natural gas prices and provides a market for the region's associated gas production.

However, the new supply pathways from Malaysia and a potential new Canadian export project introduce future competition. While U.S. Gulf Coast LNG terminals remain major suppliers, incremental volumes from other global sources could soften long-term European demand growth for American gas.

For Bakken producers, who primarily extract oil with natural gas as a byproduct, sustained international demand is crucial for maintaining gas price realizations and mitigating flaring. An increasingly crowded global LNG market could pressure prices and make pipeline exports to other U.S. regions more critical for Bakken gas.

The announcements highlight the interconnected nature of global energy markets and how deals struck halfway around the world can influence the economics of production in North Dakota. Bakken operators will monitor the finalization of these agreements and their impact on the global supply-demand balance.