Europe will import 35% more LNG this winter – Kpler

The additional volume of 21.9 Gm3 will bring the winter total to 83.8 Gm3. That will come from global LNG capacity additions, mostly from the United States, supported by weaker Asian demand, according to the company’s winter outlook.

Global LNG supply this winter is expected to increase by 13.7 billion m3 to 285.7 billion m3, with increased production from the United States and Norway, while demand in Asia is expected to fall by 6 billion m3, mainly in China.

However, Europe will see a drop of 40 to 50 billion cubic meters in supply from Russian pipelines this winter compared to last winter.

“We think LNG could only make up for about half of the lost Russian gas in your base case,” said Laura Page, principal LNG analyst at Kpler.

Europe has turned to LNG to replace Russian gas pipeline flows lost amid supply shortages caused by Moscow’s war in Ukraine and subsequent Western sanctions.

Russian supplies this winter are expected to reach 8 billion cubic meters, up from 52 billion cubic meters last winter, in the baseline scenario, which assumes Russia will reduce flows via Ukraine in early November.

Russian gas giant Gazprom said last month it could impose sanctions on Ukraine’s Naftogaz TSO, which would actually cut most deliveries to Europe – totaling around 37 million m3/day.

In the worst-case scenario, where Russia would also reduce flows through the Turkstream gas pipeline, its supply would fall to 2 billion cubic meters during the winter. In the best case of flows continuing at current levels, Russian imports would reach 12 billion m3 during the winter.

chinese lifeline

Since the start of the year, France has seen the largest increase in LNG supply on the continent to 9 billion m3, followed by 6.3 billion m3 in the United Kingdom, 5.9 billion m3 in Spain and 5.2 billion m3 in the Netherlands.

“LNG has been Europe’s saving grace,” Kpler said, as imports rose by 50 billion m3 so far this year.

Globally, LNG supply has increased by 21 bcm, or 5%, so far this year, driven by an increase of 7.7 bcm in the United States, despite the blackout. Freeport.

Europe has also attracted 24bn cc of LNG from other parts of the world, particularly China, which has seen demand destroyed due to high prices, Covid lockdowns and an economic downturn, said Kpler.

Since the beginning of the year, Chinese LNG demand has fallen by 12.5 billion m3, also due to domestic gas production up 7%, or 9.5 billion m3, and 11 % more imports by pipeline, ie 4 billion m3.

“But how much of that continues is probably one of the biggest questions facing the market right now,” Page said.

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