Press digest

2022 October 4

Europe LNG imports may rise over 50% this winter – Refinitiv

European LNG imports this winter could rise 53% on the year to around a record high of 52bcm amid attractive import prices and reduced Chinese demand, as Europe attempts to ditch Russia as a gas supplier, according to Refinitiv projections.

“Europe has established itself as a premum market [which has] led to an unprecedented surge in cargo arrivals,” Anne Kat Brevik, director of LNG research, said at a Refinitiv webinar.

She said the arbitrage to northwest Europe – rather than Asia – had been open for much of this year.

As a result – and amid European efforts to drop its reliance on Russian pipeline gas – the region could import 18bcm more in September 2022-March 2023, compared with the corresponding period last year, she said.

A “strong increase” in regasification capacity in northwest Europe should also help facilitate increased deliveries of the chilled fuel to the region, according to the firm’s analysis.

China demand

The influx in shipments to European destinations had been underpinned by lower import demand from China, Brevik said, noting the country had seen LNG imports fall by 22% – or 15.8bcm – in January-August.

This was due in part to a struggling Chinese economy, rising domestic gas production and widespread coronavirus-related lockdowns, she noted.

“With gas consumption contracting alongside continued growth in gas production, Chinese LNG imports have been dropping,” she said, adding that imports to the Asian powerhouse would be the “big question” over the coming months.

“China holds the key for European winter LNG [supply],” she said, pointing to around a 10bcm difference between high and low Chinese import demand scenarios this winter.

She said northwest Europe’s new premium market status was therefore “no guarantee against gas shortages”.