Europe’s pivot away from Russian natural gas, following the outbreak of war in Ukraine, has highlighted the importance of LNG as a commodity, the need for sound (and realistic) energy policy and the flexibility of floating storage and regasification units (FSRUs).
“Europe prays for a mild winter and friends in far flung places – from the US Freeport facility to private Chinese companies that may be able to increase LNG exports to Europe during the heating season,” noted Rystad Energy analyst Nikoline Bromander in her take on the gas and LNG markets in mid-October. As Russian pipeline gas has been reduced to a trickle, the EU has been scrambling to fill the energy gap with LNG before winter sets in. This has meant realigning policy to fast-track LNG import infrastructure in the Netherlands, Germany, Italy and other EU countries.
Perhaps the best example of fast-tracking LNG infrastructure is Gasunie’s EemsEnergy Terminal, which took in its first LNG cargo in early September and will reach full capacity by the end of November or early December. Using two FSRUs — one from Exmar and another from New Fortress Energy — the terminal was completed in record time. The EemsEnergy Terminal will supply a total of 8 billion cubic metres (bcm) of natural gas annually to the Dutch national natural gas grid. The Czech Republic has secured capacity at the terminal to meet about one-third of the nation’s natural gas needs.
“Europe prays for a mild winter and friends in far flung places”
The expansion of the Eemshaven Terminal and the optimisation of the terminal in Rotterdam will double the import capacity for LNG.
Dutch Minister for Climate and Energy, Rob Jetten said: “The import of liquid gas is indispensable for the security of gas supply for the coming winter.” He added that the EemsEnergy Terminal is an important step not only for the Netherlands, but for the whole of Europe towards reducing its dependence on energy from Russia as quickly as possible.
Leading exporters of LNG to Europe are the US, Qatar and Russia, which exported 0.96 Mt, 0.47 Mt and 0.45 Mt respectively in week 41 of 2022, according to Rystad Energy. Right around the corner will be new LNG supplies from Mozambique, where Africa’s first ultra-deepwater floating LNG vessel — the Eni-operated Coral Sul — will begin commercial operation either by the end of October or the beginning of November. As BP has secured 100% of the capacity of the FLNG over a 20-year term, those volumes will be available to Europe. These molecules will be welcomed alongside additional capacity from the US and Qatar.
The Russia-Ukraine war and the associated geopolitics have clearly led the EU to reconsider how it approaches the energy transition, and to reassess the importance of LNG and energy security. This ‘LNG paradigm shift’ will be a central theme at Riviera Maritime Media’s LNG Shipping & Terminals Conference Europe in London, 16-17 November 2022. These topics will be explored in depth by renowned LNG industry experts in individual and panel presentations. I hope to see you there!
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