This week, speculative oil positioning…
Oil prices are torn between…
Europe is importing record levels of liquefied natural gas (LNG) this year as it looks to reduce dependence on Russian pipeline gas and fill gas storage ahead of next winter.
The European Union and the UK saw a record high level of LNG imports in April 2022, when imports averaged 16.5 billion cubic feet per day (Bcf/d) and exceeded 19.0 Bcf/d on some days that month, the U.S. Energy Information Administration said on Tuesday.
Europe’s LNG imports have jumped this year as gas storage inventories were at historically low levels from the autumn of 2021 through the spring of 2022. Pipeline gas wasn’t meeting Europe’s energy needs, while higher spot LNG prices in Europe compared to Asia attracted suppliers with destination flexibility to ship LNG to Europe. Those suppliers were mostly from the United States, the EIA said.
During the first five months of 2022, the EU and UK’s imports of LNG averaged 14.9 Bcf/d. That’s 66 percent higher than the annual average in 2021 and 4.7 Bcf/d more than the pre-pandemic high of 10.3 Bcf/d in 2019, according to data from CEDIGAZ cited by the EIA.
Currently, 14 countries in Europe have LNG import facilities, but utilization of these facilities varies by region. The northern and southern parts of the European natural gas pipeline grid are not fully integrated, the EIA noted.
As Europe wants to eliminate its dependence on Russian natural gas by 2027, more countries are looking at the LNG market and at supply contracts with gas exporters other than Russia. Germany, Europe’s biggest economy, has plans for two LNG import facilities at Brunsbuettel and Wilhelmshaven.
For over six months now, Europe has been the key driver of global LNG demand as it looks to replace as much Russian pipeline gas supply as soon as possible. Since the energy crisis of last autumn, Europe has displaced Asia as the growth driver of LNG demand and is no longer “the market of last resort” for LNG cargoes.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.