EU's Winter Gas Supplies Hang by a Thread Amid Uncertainty
The European Union's reliance on liquefied natural gas (LNG) is facing uncertainty ahead of this winter, according to energy company executives. The war in Ukraine and traders' decisions are influenced by uncertainty over when new gas regasification capacity will come online and the likelihood of a cold winter in Asia.
The EU intends to maximize LNG supplies to Europe during the coming winter, but the situation may not be straightforward due to high levels of uncertainty. Representatives of energy companies contacted by Reuters have warned that the entire LNG sector faces several challenges, including unpredictable weather and potential disruptions to Russian gas supplies.
Steve Hill of Shell noted that if we convert the volume of Russian pipeline gas supplied to Europe in 2021 into an LNG equivalent, it amounts to 200 million tonnes. This is half the size of the current global LNG market, adding to concerns about energy security.
New European legislation requiring storage facilities to be filled to at least 80% of their capacity before winter may help buyers enter this winter better prepared than last year.