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Europe’s Dependence On Natural Gas Imports Hits 80%

The European Union and the UK have seen their dependence on natural gas imports jump to 80 percent in 2020 from 65 percent in 2010, as regional production plunged, the U.S. Energy Information Administration (EIA) said on Friday. 

The high dependence on gas imports and the low levels of gas in storage have played the main role leading up to the gas and power crisis in Europe, where energy costs have soared over the past few months.

In 2020, pipeline natural gas imports into the EU plus the UK region accounted for 74 percent of all natural gas imports, and LNG accounted for the remaining 26 percent of imports, according to EIA data.

The largest pipeline gas supplier is Russia, with over one-third of all the gas the UK and the 27 member states of the EU consume.

Despite the construction of new pipelines, imports from Norway – not an EU member – averaged around 9 Bcf/d between 2010 and 2020, as the development of new fields in the Barents Sea of the Norwegian Continental Shelf was insufficient to offset declines from mature fields in the North Sea, the EIA noted.

The UK, a major European natural gas producer alongside Norway, could see gas production plunge by 75 percent by 2030 unless new offshore fields are approved and developed, the offshore industry body OGUK says.

Without new investment in new gas fields in the North Sea, the UK will be left more vulnerable to crises, such as the current one between Russia and Ukraine, the industry association noted.

According to Fitch Ratings, low inventories, reduced deliveries from Russian giant Gazprom, and increased geopolitical tensions have contributed to the already tight European gas market and prompted the search for additional supplies.

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“While Europe will remain reliant on Russian gas supplies in the near term, in the longer term this may lead to a more diversified supplier base and faster energy transition,” Fitch said in an analysis this week.

By Tsvetana Paraskova for Oilprice.com

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  • Mamdouh Salameh on February 11 2022 said:
    Europe is now facing a full blown energy crisis as a result of the EU's hasty policies to accelerate energy transition at the expense of fossil fuels, misjudgement of the global gas market, putting its faith in the spot gas market instead of long-term fixed contracts and failure to fill its gas storage ahead of winter.

    Moreover, Europe also tried to play gas geopolitics with Russia by delaying the certification of Nord Stream 2 gas pipeline but it has proven to be not up to the task. Had it certified Nord Stream 2 in last September, it would have helped alleviate its ongoing energy crisis and also fill its gas storage which currently stands at 14.9 billion cubic metres (bcm) or 26% of capacity.

    As a result, Europe’s dependence on gas imports will continue to grow well into the future and the Europeans will continue to pay excessive energy prices for the time being.

    The entire LNG exports from the United States, Qatar and Australia could hardly replace the almost 200 billion cubic metres per annum (bcm/y) piped by Russia to the EU in addition to an estimated 15-16 million tons a year (mt/y) of LNG. Only Russia can satisfy the EU’s gas demand. However, Russia isn’t going to ship additional gas supplies to the EU until Nord Stream gas pipeline is certified.

    Moreover, Europe has a limited LNG import capacity. This makes ramp-ups of LNG imports quite useless particularly if they are needed to replace Russia’s almost 40% share of the European gas market.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

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