Page 4 - GLNG Week 34

GLNG COMMENTARY GLNG
Cheap LNG floods Europe
LNG imports into Europe are booming, buoyed by low spot prices and weak Asian demand, as more regasi cation capacity is built, writes Anna Kachkova
PERFORMANCE
WHAT:
LNG imports into Europe have tripled over the past 10 months.
WHY:
European buyers are bene ting from lower prices and weak spot demand in Asia.
WHAT NEXT:
New regasi cation capacity is being built in European countries including Germany.
EUROPE has experienced a surge in LNG imports in recent months, fuelled by growth in global LNG supply, low prices and weak spot demand in Asia. LNG imports into Europe are estimated to have tripled in the past 10 months, and traditional suppliers of pipeline gas to the region are losing market share as a result.
Natural gas prices in Europe slumped to 10-year lows in July, contributing to the boom in LNG shipments. is has also led to storage tanks on the continent being lled ahead of the winter heating season, when traders are seeking to bene t from higher gas prices.
Gas Infrastructure Europe, a trade associ- ation, estimates that gas storage in the region was over 91% full on August 29, with the gure above 97% in Portugal, Denmark and the Czech Republic.
Traditionally, north-west Europe has led the continent in receiving LNG imports. But this summer, Spain is also receiving near-record levels of LNG amid a heatwave that has raised cooling demand while depleting the amount of water that is available for hydropower genera- tion. Spain accounts for almost a third of Euro- pean gas storage capacity and its volume of LNG imports is predicted to keep growing. Spanish gas grid operator Enagas said on August 27 that the country would import more LNG in Septem- ber than previously scheduled, while October deliveries were also anticipated to be higher year on year.
Market share
Data from analytics rm Re nitiv, reported last week, showed that the share of LNG in gas sup- plied to Western and Central Europe expanded to 14% between October 2018 and August 2019. e gure accounted for 5% of gas in the same period of 2017-18.
Meanwhile, Norway’s Equinor and Russia’s Gazprom, the two largest suppliers of pipeline gas to Europe, saw their market share decline for the rst time in four years. is is despite the fact that Gazprom’s total exports to Europe rose amid increased demand, with the continent importing 9% more gas y/y between October 2018 and August 2019. Nonetheless, Gazprom’s market share slipped by 1% to 32%, marking the rst drop since 2014-15. Equinor’s share fell to a multi-year low of 33%, from 38% previously.
A Re nitiv gas market analyst, Marina Tsy- gankova, was reported by Reuters as saying that most of the increased volumes of Russian gas had gone to countries that do not have direct access to LNG imports, such as Slovakia and the Czech Republic. This comes as European countries stockpile gas ahead of the gas transit agreement between Russia and Ukraine expiring at the end of 2019 and no progress in talks on its renewal.
Building import capacity
Looking further ahead, countries with access to LNG import infrastructure are expanding their regasi cation capacity in a bid to lower their
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w w w . N E W S B A S E . c o m Week 34 29•August•2019