Page 8 - EurOil Week 33

EurOil COMMENTARY EurOil

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

P8 www. NEWSBASE .com Week 33 20•August•2020