Europe heading for huge excess LNG import capacity, experts warn – POLITICO
▻https://www.politico.eu/article/europe-huge-excess-lng-liquefied-natural-gas-import-capacity-expert-warn
Many European countries fast-tracked plans for new liquefied natural gas (LNG) infrastructure to bring in supplies by sea
Filippo Monteferte/AFP via Getty Images
European countries risk wasting huge sums of money on gas import infrastructure they won’t need after “panicking” in response to Russia’s pipeline shutoffs, expert analysts warned.
In a rush to find alternative sources of gas after Russia’s Gazprom began limiting Europe’s vital pipeline imports, many European countries — and Germany in particular — fast-tracked plans for new liquefied natural gas (LNG) infrastructure to bring in supplies by sea from the United States, Qatar and elsewhere.
But according to a new analysis by the Institute for Energy Economics and Financial Analysis (IEEFA), shared with POLITICO, European countries may have hugely overshot the mark, with current planned import capacity far exceeding likely LNG demand by 2030.
If current infrastructure plans are carried out, LNG terminal capacity across Europe — including in the U.K., Norway and Turkey, which are closely connected to the EU’s gas market — could exceed 400 billion cubic meters (bcm), the analysis shows.
But with EU-wide gas demand already falling and renewable sources of electricity projected to make up a larger and larger share of Europe’s energy mix, actual LNG demand in 2030 could be as low as 150 bcm, IEEFA predicts.
That would leave a gap of 250 bcm of unused LNG import capacity, equivalent to more than half of Europe’s overall gas demand, which stood at 413 bcm in 2021.
Such a situation could see terminals across Europe sitting idle and becoming “stranded assets,” warned Ana Maria Jaller-Makarewicz, energy analyst at IEEFA and author of the new analysis.
“This is the world’s most expensive and unnecessary insurance policy,” she said, adding that Europe should consider dropping some planned projects.
