It has been determined that Europe’s liquefied natural gas (LNG) terminal capacity will exceed 400 billion cubic meters by 2030, and more than half of this capacity is at risk of being idle due to low demand.
It has been determined that Europe’s liquefied natural gas (LNG) terminal capacity will exceed 400 billion cubic meters by 2030, and more than half of this capacity is at risk of being idle due to low demand.
According to the European LNG Tracker report by the Institute for Energy Economics and Financial Analysis (IEEFA), Europe’s LNG infrastructure capacity, including the United Kingdom, Norway and Turkey, reached 270 billion cubic meters by the end of 2022.
SEEKING AN ALTERNATIVE TO RUSSIAN GAS, EUROPE ACCEPTED LNG
Europe, which sought alternative ways and resources to reduce dependence on Russian gas after the war started by Russia in Ukraine, accelerated its LNG investments, and a large capacity building is planned until 2030 in this area.
Europe’s LNG infrastructure capacity is expected to exceed 400 billion cubic meters by 2030, while LNG demand in Europe is expected to be at the level of 150 billion cubic meters in this period.
Thus, there is a risk that the LNG infrastructure with a capacity of approximately 250 billion cubic meters in Europe will remain idle. Spain, Turkey, United Kingdom, France, Italy and Germany stand out as the countries where the most idle capacity can occur.
It is estimated that the planned LNG infrastructure capacity in Europe by 2030 will be higher than the European Union’s gas consumption of 413 billion cubic meters in 2021. By contrast, the total gas demand in Europe in 2030 is expected to be 390 billion cubic meters.
‘THE WORLD’S MOST EXPENSIVE AND UNNECESSARY POLICY’
The report’s author and IEEFA Analyst Ana Maria Jaller-Makarewicz stated that excess LNG capacity is “the world’s most expensive and unnecessary guarantee policy”, adding that “Europe must carefully balance its gas and LNG systems. Increasing the LNG infrastructure will not increase the reliability of the system. This is also a situation that poses the risk of these assets being idle.” used the phrases.
Stating that LNG is costly infrastructures to build and operate, Jaller-Makarewicz said, “Decisions to expand LNG infrastructure in Europe should be based on future demand needs. The EU aims to reduce gas demand by a third by 2030. All this must be taken into account.” made its assessment.
DEPENDENCE ON RUSSIAN LNG DEPENDS
Although Europe’s pipeline gas imports from Russia decreased significantly after the war, LNG imports increased.
According to IEEFA, Europe received 20.2 billion cubic meters of LNG from Russia in 2022. This was recorded as a 12 percent increase compared to LNG imports, which was 18 billion cubic meters in the previous year. Russia has become Europe’s third largest LNG supplier after the United States and Qatar.
While France is the largest LNG importer in Europe with 35.7 billion cubic meters in 2022, 7.4 billion cubic meters of this import came from Russia.
While Spain supplied 5.2 billion cubic meters of total 29.5 billion cubic meters of LNG imports from Russia, Belgium received 3 billion cubic meters of 12.9 billion cubic meters of LNG imports from Russia.
France and Belgium’s LNG imports from Russia increased by 58 percent in 2022, while Spain’s LNG imports increased by 50 percent.
Although the UK was the third largest LNG importer in Europe with 26.5 billion cubic meters last year, LNG imports from Russia fell by 85% compared to 2021.
Last year, the Netherlands imported 17.1 billion cubic meters of LNG, Turkey 15.5 billion cubic meters and Italy 14.8 billion cubic meters.