Page 9 - GLNG Week 24 2022

GLNG COMMENTARY GLNG

capacity in full until the end of March 2022.
Europe has been replenishing its storage US Freeport terminal in Texas this month. Free-
tanks at the fastest pace in many years. At the port LNG, one of the largest sources of US LNG
end of winter Brussels ordered that the tanks be exports, is due to remain shut for three weeks,
90% full by the start of the heating season, just as and the downtime could be longer given that
the debate on shutting off Russian gas deliveries the extent of the damage is yet to be determined,
to Europe completely was gathering steam. That Rystad Energy said in a note. The plant had been
goal was later revised down to 80%, but the pace running at close to its capacity in recent months,
has been relentless. helping Europe offset recent disruptions in Rus-
The fast pace has been fed by record deliveries sian supply.
of LNG to Europe. The US made 15bcm available The bulk of Freeport LNG’s output had been
and has diverted some of its deliveries from Asia heading to Europe before the incident – rising
to ensure that its allies in Europe have enough from 40% in March to close to 60% in May. The
gas before the winter. plant has been able to quickly divert extra sup-
LNG supplies from terminals to Europe’s gas ply to Europe amid soaring prices and Moscow’s
transport system in May hit a record high for the invasion thanks to the fact that most of its capac-
month, reaching 10.8bcm, which exceeds the ity is uncontracted.
previous record of 10.27bcm of May 2020. LNG
reserves in EU states are 13% higher now than in Who dunnit?
2021, and 12% higher than a five-year average. Gazprom was accused of squeezing gas supplies
The Grain LNG terminal in the UK, the to Europe last year and exacerbating the gas cri-
largest in Europe and eight largest in the world, sis to put pressure on the EU to sign off on new
posted record gas send-out levels in April, as long-term gas contracts the Kremlin needs to
high demand for gas from Europe pushed utili- develop its vast Yamal gas deposits.
sation rates up, with LNG tankers arriving from Gazprom made a point of sticking scrupu-
eight new countries since January. The terminal lously to the terms of its supply contracts at a
saw its highest ever utilisation rate in April, send- time when shortage and panic had sent gas spot
ing out an average of 431 GWh per day, more prices through the roof.
than the previous high of 412.2 GWh in April Now some observers say that Gazprom is
2021, reports bne IntelliNews’ sister publication again using gas as a political weapon in its con-
Newsbase.com. frontation with the west with the goal of mak-
Total LNG deliveries to Europe’s gas transport ing sure that Europe does not have enough gas
system have reached around 52.45bcm year-to- in storage before the heating season starts in
date. To compare, Gazprom exported 61bcm of October.
gas to non-CIS states (including China) in the However, with Europe’s tanks, and especially
same period. those in Germany and Italy, half full by June it
And Europe’s LNG capacity will only grow. In seems that Europe is on course to have enough
the wake of Russia’s invasion of Ukraine, a raft of gas ready to use in five month’s time.
new LNG import projects have been proposed Gazprom’s slowdown in delivery – and the
across Europe, while a number of pre-invasion Nord Stream 1 pipeline is due for its annual
projects that once were considered to have a maintenance break in July – also can be seen as
questionable economic case are now moving a threat of the Kremlin deciding to unilaterally
forward swiftly. cutting Europe off from gas as part of its clash
The flood of gas entering Europe has also with the West. This scenario is considered highly
taken the pressure off prices which soared unlikely by analysts as although it would cause a
20-fold during the worst of the European gas gas crisis in Europe, the deliveries would not be
crisis that started last summer. restarted and the Kremlin would have to forego
However, LNG deliveries to Europe from the significant amounts of revenue it currently badly
US will likely slow following an explosion at the needs to finance its war.--

Week 24 17•June•2022 www. NEWSBASE .com P9