Liquefied gas imports are heading for an 11 percent decline this year, and By the end of the decade this decline should accelerate to 37 percent.estimates the Institute for Energy Economics and Financial Analysis (IEEFA) in a new report.
Meanwhile, some countries are still planning to build more terminals, which, given falling consumption, could result in three-quarters of the continent’s import capacity going unused by 2030.
Will billions of euros in LNG investments go down the drain?
Europe has invested billions of dollars in LNG over the past two years in response to the Kremlin’s attack on Ukraine, replacing Russia’s once dominant pipeline gas supplies.
However, in the first six months of this year, half of the European Union’s LNG import terminals had utilisation rates below 50%.
The average EU LNG import terminal utilisation rate fell to 47% in the first half of the year from 63% a year ago, the Cleveland-based think tank said. LNG’s share of European gas demand fell to 31% from 37%.
Bloomberg
The example of Germany
Germany has rented many floating terminals, to bring in supplies of liquefied gas by sea from places like the USA. Now they are building onshore LNG installations. However, demand for this fuel is under threat because at the same time Berlin is investing in wind and solar energy production.
Ana Maria Jaller-Makarewicz, chief European energy analyst at IEEFA, believes Germany’s LNG regasification capacity will nearly triple by the end of the decade. In her assessment, which she emailed to Bloomberg, gas consumption will continue to be reduced by increased electrification and renewables, and it’s unclear whether Germany will need as much of it.
In the first half of this year, demand for gas in the country fell by 4 percent. compared with a year earlier, she said. The outlook for industrial demand is also grim as the energy crisis has paralyzed operations and forced some plants to close or relocate to cheaper fuel.
LNG is to ensure energy security
Bloomberg recalls that German politicians have stated that the expansion is necessary to ensure the country’s energy security and overcome dangerous dependence on Russian gas.
IEEFA predicts that European LNG import capacity will increase by 21% to 414 billion cubic meters by 2030meaning there could be more than 300 billion m3 of unused capacity.
Undoubtedly, European LNG terminals are ready to ensure security of supply, and their use varies throughout the year depending on the weather, availability of pipeline gas and changes in global demand – Bloomberg summarizes.
