Page 6 - EurOil Week 42 2022

EurOil COMMENTARY EurOil

For example, such measures include reducing accumulated in storage, but volumes will like-
lighting and lowering thermostats in public ly be heavily depleted. If for example, Europe
buildings and closing non-essential infrastruc- leaves this winter with its storage facilities filled
ture. Households are conserving energy anyway, to only 20%, it will have to inject some 70 bcm
regardless of what instructions governments of gas to reach 90% utilisation by next winter.
make, because of high prices. Prices so far have been high but also very
Governments must also take a more prag- volatile. With unreliable Russian supply already
matic approach to expanding the use of alter- at an all-time low, next year is likely to see a lot
native fuels and energy sources to gas wherever less volatility, but prices will still be high, further
possible. That means Germany delaying plans to exacerbating the economic crisis.
close down its remaining nuclear power plants And not much extra LNG supply will come
(NPPs) at the end of this year. It also means online in the meantime, or beyond next year.
burning more coal and oil, despite the envi- New liquefaction plants coming online in the
ronmental cost. Failure to take such steps will next few years are mainly small in scale, save
further worsen the coming recession, making it for Russia’s Arctic LNG-2 plant, officially due to
harder for countries to invest in decarbonisation start up in 2023-2024. But sanctions have made
further down the line. the outlook for that project very unclear. Mean-
while, large-scale plants such as North Field
This winter is not the last East in Qatar, Golden Pass, Plaquemines and
Europe must also prepare for next winter as Corpus Christi Stage 3 in the US, and Canada
well as this one. Europe will make it through LNG, are not expected to be operational until
this winter with the amount of gas that it has 2025 or later. ™

P6 www. NEWSBASE .com Week 42 20•October•2022