LNG Only Fills Niches in Europe

Shailaja A. Lakshmi
Thursday, February 28, 2019

Although LNG (Liquid Natural Gas) provides a solid supplement to European gas supplies, the EU is and will remain a pipeline market – for good reasons, said Wintershall's new position paper.

The report from Germany's largest crude oil and natural gas producer on the importance of liquid gas for Europe said that the liquefaction is highly energy-intensive – the energy consumption corresponds to about 13% of the gas transported.

With an energy loss of less than five percent, pipelines are much more energy-efficient. Another argument for pipeline gas lay in its lower costs. Russian pipeline gas, for example, is more competitive and less expensive than LNG from the USA.

Since the EU's own gas production is declining, Wintershall welcomes any additional import route. However, LNG terminals shall make economic sense. They should not be politically enforced or "inflated" by subsidies – at the taxpayers' expense.

The EU is fortunate to have two of the leading gas producers within pipeline distance: Russia and Norway alone supply over 60% of the EU's natural gas. LNG, on the other hand, contributes only about 16%. Existing LNG terminals in the EU have been operating at less than 30% capacity in recent years.

Moreover, Europe has so far only been a residual market for LNG. This was demonstrated, for example, by the cold snap in February 2018: Even then, LNG continued to go to Asia because higher prices were paid there. It was Russian pipelines that secured supplies in Europe.

Nevertheless liquid natural gas is not only an option for the heating market, but also for the transport sector – an exciting option for Europe. Particularly for maritime shipping and heavy goods traffic, since it could replace heavy oil and diesel. LNG thus can help to protect the climate.

Categories: Energy LNG Europe Research

Related Stories

Centrica and Thailand’s PTT Ink Long-Term LNG Supply Deal

CNOOC Signs Hydrocarbons Exploration and Production Deal with Kazakhstan

Woodside and Jera Agree LNG Cargoes Supply for Japan’s Winter Period

Petronas Expands Suriname Portfolio with Deepwater Block Acquisition

Yinson Production, “K” LINE Target Europe's CCS with FSIU and LCO2 Solutions

Woodside Agrees Long-Term LNG Supply with Petronas Unit

Yinson Production Closes $1B Investment to Drive Further Growth

UK Firm Secures Exploration Extension for Two Blocks off Vietnam

OMV Exits Ghasha Gas Project off UAE with Lukoil Stake Sale

Woodside to Shed Some Trinidad and Tobago Assets for $206M

Current News

Yinson Production Secures $1.17B Refinancing for FPSO Maria Quitéria

Centrica and Thailand’s PTT Ink Long-Term LNG Supply Deal

Petrovietnam, Partners Sign PSC for Block Off Vietnam

Japan Protests China’s New Oil and Gas Construction Activities in East China Sea

CNOOC Signs Hydrocarbons Exploration and Production Deal with Kazakhstan

Thailand's PTT to Buy LNG from Glenfarne's Alaska LNG Project

Woodside and Jera Agree LNG Cargoes Supply for Japan’s Winter Period

Petronas Expands Suriname Portfolio with Deepwater Block Acquisition

Japanese Oil and Gas Firm Enters Two Blocks off Malaysia

Yinson Production, “K” LINE Target Europe's CCS with FSIU and LCO2 Solutions

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com