 |
Louisiana Light • 2 days | 86.49 | -0.63 | -0.72% | ||
|
Bonny Light • 2 days | 89.32 | +0.45 | +0.51% | ||
|
Opec Basket • 2 days | 88.45 | +1.94 | +2.24% | ||
|
Mars US • 174 days | 77.26 | -1.51 | -1.92% | ||
|
Gasoline • 11 mins | 2.768 | +0.033 | +1.22% |
|
Bonny Light • 2 days | 89.32 | +0.45 | +0.51% | ||
|
Girassol • 2 days | 89.90 | +0.45 | +0.50% | ||
|
Opec Basket • 2 days | 88.45 | +1.94 | +2.24% |
|
Peace Sour • 15 hours | 76.01 | -0.55 | -0.72% | ||
|
Light Sour Blend • 15 hours | 79.06 | -0.55 | -0.69% | ||
|
Syncrude Sweet Premium • 15 hours | 86.01 | -0.55 | -0.64% | ||
|
Central Alberta • 15 hours | 76.41 | -0.55 | -0.71% |
|
Eagle Ford • 2 days | 79.29 | -0.04 | -0.05% | ||
|
Oklahoma Sweet • 2 days | 79.25 | -0.50 | -0.63% | ||
|
Kansas Common • 3 days | 73.50 | +0.50 | +0.68% | ||
|
Buena Vista • 4 days | 87.02 | -0.29 | -0.33% |
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Europe Scrambles To Accommodate LNG Import Surge
While Europe is set to import an increasing amount of liquefied natural gas (LNG) as part of its efforts to reduce reliance on Russian pipeline gas, the European market is struggling to secure enough floating storage and regasification units (FSRUs) and advance LNG import facilities construction.
“Europe is screaming for FSRUs to get energy in, whatever it costs,” Yngvil Asheim, managing director of Norway-based FSRU owner BW LNG, told the Financial Times.
Last week, the European Union and the United States announced a deal for more U.S. liquefied natural gas exports to the EU as the latter seeks to replace Russian supplies, on which it is dependent. According to the terms of the deal, the United States will deliver at least 15 billion cubic meters of liquefied natural gas to the EU this year more than previously planned, the White House said in a fact sheet.
Europe–unlike the United States–cannot afford to go without Russian gas currently, so the European partners have been reluctant to slap sanctions or impose an embargo of imports of oil and gas from Russia.
The Russian war in Ukraine made Europe rethink its energy strategy, and the European Union has now drafted plans to cut EU demand for Russian gas by two-thirds before the end of 2022 and completely by 2030, to replenish gas stocks for winter and ensure the provision of affordable, secure, and sustainable energy.
However, FSRUs and LNG import terminals currently operating in Europe are not enough, according to analysts who spoke to FT. It will take years for terminals to be built.
Germany, for example, doesn’t have any LNG import terminals now, but in the wake of the Russian war in Ukraine, Europe’s biggest economy announced it was changing course “in order to eliminate our dependence on imports from individual energy suppliers,” as German Chancellor Olaf Scholz said. Germany will build two LNG import facilities, at Brunsbuettel and Wilhelmshaven. Last week, German LNG Terminal and Shell signed an agreement under which Shell will make a long-term booking of a substantial part of the Brunsbuettel terminal’s capacity for the import of LNG.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana Paraskova
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.
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The EU can start reducing its dependence on Russian gas supplies little by little but replacing Russian gas is virtually impossible for the foreseeable future. There are many reasons for that.
The first is that to replace Russian gas, the EU has to import most of its needs in LNG instead. However, the entire LNG exports of the US, Qatar and Australia as well as Norway’s gas exports to the EU could barely replace 200 billion cubic metres (bcm) of Russian piped gas and 15-16 million tonnes of LNG. Moreover, most of the US, Qatari and Australian LNG exports are normally contracted to customers in the Asia-Pacific region years ahead. Furthermore, Russian piped gas is far cheaper than LNG.
The second reason is that the EU doesn’t have enough LNG import terminals and is struggling to secure enough floating storage and regasification units (FSRUs) and advance LNG import facilities construction. Germany which is 65% dependent on Russian oil and gas supplies doesn’t have any LNG import terminals now. Moreover, it takes years for terminals to be built.
The third reason is that other gas suppliers can't replace Russian gas supplies well into the future. Norway, for instance, isn’t capable of raising its production and exports higher at least for the next five years. Iran will need 1-2 decades before it is able to build gas pipelines to ship gas to the EU via Turkey or to build plants to convert its gas into LNG and ship it to the EU.
If Russia decide to halt its gas supplies to the EU, it will plunge the EU in far worse and damaging energy crisis than the one currently enveloping it. The new import bill will cripple the EU economy and reduce its economic growth this year to almost zero.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London
Oil and Gas will NEVER be cheap again...
The lack of investment into new wells and fields since 2015 means he days of over-supply are clearly over. To get anyone to invest in new production is almost impossible so current producers with large reserves (Canadian oil sands companies) will make a ton of money and their valuations will soar...