Page 9 - GLNG Week 32

GLNG COMMENTARY GLNG
Competition between pipeline
gas, LNG in Europe rises as
regasification capacity grows
LNG imports are increasingly competing with pipeline gas in Europe, with further regasification capacity under development
PERFORMANCE
WHAT:
LNG is increasingly competing with pipeline gas imports into Europe.
WHY:
Regasification capacity is growing and various European countries are diversifying their gas supply mix.
WHAT NEXT:
A number of European countries are set to become LNG importers in the coming years.
LNG imports into Europe are on the rise, and grew in the first half of this year despite the impact of the coronavirus (COVID-19) pan- demic on global demand. European gas import- ers stand to benefit from rising competition between LNG and pipeline gas, resulting in lower prices and diversified sources of supply. And while Asia is set to dominate regasification capacity additions in the coming years, Europe is expected to be the second-largest region for new import capacity.
These trends have been highlighted by vari- ous sources in recent days, with the Gas Export- ing Countries Forum (GECF) commenting on the intensifying competition between pipeline gas and LNG imports to Europe, while Global Energy Monitor recently released an update on upcoming regasification capacity additions.
The picture that has been painted by these reports bodes well for European diversity and security of supply. For a continent that has struggled with a dependence on Russian gas and disruptions to that supply in the not-too-distant past, this comes as a welcome development.
On the rise
According to Global Energy Monitor’s ‘Gas bub- ble: Tracking global LNG infrastructure’ report, there was 155.3mn tonnes per year of LNG import capacity in Europe as of May 2020 – or 178.5mn tpy if Turkey is included. The organisa- tion estimates that a further 6.8mn tpy of regasi- fication capacity is currently under construction on the continent, and 67.9mn tpy more has been proposed across Europe – or 73.3mn tpy includ- ing Turkey.
If all of this proposed capacity is ultimately built – which it will not, as some projects will likely be cancelled – total European regasi- fication capacity could rise to 230mn tpy, or 258.6mn tpy including Turkey, by 2030. This would amount to almost a 45% increase from today.
Global Energy Monitor described Europe as the second growth market for LNG after China, accounting for 19% of present-day import capacity and 23% of the capacity under construction and in pre-construction devel- opment. And as the continent’s regasification capacity grows, new countries are set to join the ranks of LNG importers. In Europe, Croatia and Cyprus are among the first in line to become new importers of the fuel, with projects already under construction. Beyond this, Estonia, Ger- many, Latvia, Romania and Ireland could also begin importing LNG if their proposed regasifi- cation projects go ahead – though public oppo- sition in Ireland could prove to be a significant obstacle.
According to Global Energy Monitor, there are 24 LNG import terminals currently under construction or proposed in European Union member states. In addition, new regasification capacity has been proposed for the UK – no longer an EU member – and Turkey.
Week 32 14•August•2020 w w w . N E W S B A S E . c o m P9