Page 5 - GLNG Week 34
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GLNG COMMENTARY GLNG
dependence on Russian gas. Notable among these is Germany, which is expected to build four new LNG import terminals by 2023.
e country’s e orts can also be considered to be a result of pressure by the US over partner- ing with Gazprom to develop the Nord Stream 2 pipeline. When the pipeline enters service, it will likely double the amount of gas Germany receives from Russia – and Russian gas already accounts for over a third of German imports. e government of US President Donald Trump has been keen to promote US LNG as an alternative to Russian gas as new liquefaction projects start up in the North American country. At the same time, US Congress is considering legislation to impose sanctions on the companies involved in building Nord Stream 2.
e German government has described its e orts to import more LNG as “a gesture to our American friends”. Buying more LNG will also help Germany to diversify its energy supply as it moves to phase out coal- red power generation by 2038. Coal- red power accounts for around 40% of the country’s energy mix currently.
“Germany’s coal exit would lead to an increased import demand of natural gas,” a spokesperson for the German Federal Ministry for Economic A airs and Energy was reported as saying this week. “ erefore we welcome the expansion of Germany’s gas transport infra- structure and especially the advanced plans for building LNG import terminals.”
According to analytics rm GlobalData, the four new LNG import terminals would account
for 635bn cubic feet (18bn cubic metres) of regasi cation capacity by 2023. is would boost Europe’s LNG import capacity by nearly a third.
Final investment decisions (FIDs) for the four projects are anticipated later this year.
What next?
Europe’s LNG push is expected to continue, though spot price trends and Asian demand will a ect the pace at which imports keep growing.
According to the US Department of Energy (DoE), shipments to Europe accounted for almost 40% of US LNG exports in the rst ve months of 2019. e country’s exports to Europe only surpassed shipments to Asia for the rst time in January 2019.
e ongoing trade war between the US and China is another contributing factor to Europe becoming an increasingly attractive market for US LNG. With no resolution in sight, the Euro- pean spot market will continue to bene t as new US LNG export capacity comes online. In the longer term, though, an end to the trade war will see more US LNG diverted to China once again.
For now, the US is the European Union’s third largest supplier of LNG, while according to the European Commission, the EU has become the primary destination for US LNG exports. Only last year, Europe was not considered to be a par- ticularly attractive destination for LNG ship- ments, and given the ongoing tensions between the US and countries such as China and Russia, the global LNG market has potential to remain unpredictable for some time.
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.
Week 34 29•August•2019 w w w . N E W S B A S E . c o m
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