• 2 minutes California to ban gasoline for lawn mowers, chain saws, leaf blowers, off road equipment, etc.
  • 6 minutes China and India are both needing more coal and prices are now extremely high. They need maximum fossil fuel.
  • 11 minutes Europeans and Americans are beginning to see the results of depending on renewables.
  • 14 mins Monday 9/13 - "High Natural Gas Prices Today Will Send U.S. Production Soaring Next Year" by Irina Slav
  • 2 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 7 hours Two Good and Plausible Ideas about Saving Water and Redirecting it to Where it is Needed.
  • 1 day Did China cherry-pick the factors that affected the economic slow-down?
  • 1 day "Here is The Hidden $150 Trillion Agenda Behind The "Crusade" Against Climate Change" - Zero Hedge re: Bank of America REPORT
  • 2 hours Is China Rising or Falling? Has it Enraged the World and Lost its Way? How is their Economy Doing?
  • 4 days U.S. : Employers Can Buy Retirement Security for $2.64 an Hour
  • 5 hours NordStream2
  • 4 days Nord Stream - US/German consultations
  • 410 days Class Act: Bet You've Never Seen A President Do This.
  • 3 days Forecasts for Natural Gas
  • 4 days Australia sues Neoen for lack of power from its Tesla battery
Long-Term LNG Becomes Sellers Market As Prices Soar

Long-Term LNG Becomes Sellers Market As Prices Soar

Surging spot prices of liquefied…

Two Reasons European Natural Gas Prices Climbed So High

Two Reasons European Natural Gas Prices Climbed So High

With European natural gas prices…

Will Natural Gas Survive A Net-Zero World?

Will Natural Gas Survive A Net-Zero World?

Natural gas is often dubbed…

Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

More Info

Premium Content

Europe To Become An Increasingly Important LNG Market

Europe has long been considered as the ‘sink’ of the liquefied natural gas (LNG) market, absorbing the cargoes that don’t get sold on the booming Asian market.

LNG analysts and industry officials, however, expect Europe to become a genuine LNG demand market after 2021, as natural gas production in northwest Europe is set for a decline and as global LNG supply growth is set to likely outstrip Asian demand growth.

This winter’s LNG trade patterns have highlighted the role of Europe as a ‘last-resort’ LNG market for suppliers.

Asian LNG prices have been at their weakest in three years so far this winter. So U.S. cargoes have found home in Europe, which has been the top buyer of U.S. LNG this winter season.

Meanwhile, Asian LNG spot prices fell last week for a fifth consecutive week amid above-average temperatures and ample supply. Major Asian buyers—especially China—had stockpiled gas well ahead of the winter. Milder winter weather in some parts of Asia and high stockpiles mean that there is currently little appetite for spot cargoes.

With weak Asian prices, Europe has been acting as the ‘dump’ for LNG cargoes, but experts at the ongoing European Gas Conference in Vienna believe that the European market will start to show ‘genuine’ demand in a year or two.

“Europe will not just play the balancing role… Europe will become more dependent on LNG,” S&P Global Platts quoted the head of LNG at OMV, Elena Sidorochkina, as saying at the conference. 

Natural gas production in northwest Europe is set for a decline in coming years, as the Netherlands is reducing production at the huge Groningen field, aiming to terminate production by 2030. The UK and Norway may also see drops in natural gas exports to nearby countries in northwest Europe. Related: The ‘Venezuela Benefit’ For Canadian Oil Producers Is Limited

At the same time, global LNG supply is expected to continuously grow, likely outpacing Asia’s LNG demand growth, analysts and officials say.

According to energy consultancy Wood Mackenzie, this year could be a record year for LNG projects approved, with more than 60 mmtpa of capacity likely to reach final investment decision (FID). This will be well above the previous record of 45 mmtpa sanctioned in 2005 and triple the 21 mmtpa projects sanctioned last year.

“Frontrunners in the race to hit FID include the US$27 billion Arctic LNG-2 in Russia, at least one project in Mozambique and three in the US. Our picks in the US are Golden Pass, Calcasieu Pass and Sabine Pass Train 6,” WoodMac said in its 2019 outlook.

At the same time, the consultancy noted that “Asian LNG demand growth will not keep pace with LNG supply and Europe, northwest Europe in particular, will have to absorb the surplus, especially during the summer.”

European natural gas import demand will grow, while Russia’s pipeline gas capacity is limited by infrastructure bottlenecks in Europe, especially at the Baumgarten gas hub in Austria, according to Wood Mackenzie’s Hadrien Collineau, Senior Research Analyst, EMEARC Commodity Analytics for Gas and LNG.

It’s not that Russia doesn’t have the natural gas or the capacity to export that gas, rather, it will be infrastructure bottlenecks that could limit volumes to Europe. Related: Political Crisis In Venezuela To Reshape OPEC

“Wood Mackenzie believes Europe’s LNG requirements will more than double by 2025. Europe’s growing gas import dependency, coupled with constraints on Russian pipeline exports, mean that LNG imports will have to increase,” Collineau said.

“For some time, northwest Europe has been regarded as the “sink” of the global LNG market,” the analyst added.

However, northwest Europe will have to compete for LNG imports on the global market after 2020, Collineau noted.  

Europe may have been seen as the one picking up the leftover supply from Asia, but analysts believe that the European market will soon start to play a more important role in LNG demand.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News