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Europe’s prospects for replacing Russian gas with American estimated: Markets: Economics:

Bloomberg: American LNG will not replace Russian gas for Europe next winter

U.S. supplies of liquefied natural gas (LNG) will not be enough to completely replace Russian gas in Europe next winter and help the region avoid fuel shortages. So appreciated prospects agency Bloomberg.

U.S. gas currently accounts for 40 percent of Europe’s LNG imports, and supplies will increase by nine billion cubic meters in April-September 2023 compared to the same period this year. However, losses EU from the termination of Russian gas imports in the event of a halt in supplies through the remaining Ukrainian route may amount to 20 billion cubic meters.

The situation with gas next winter will be fundamentally different in that this year Russia managed to deliver significant volumes of gas, and the reduction of imports began only at the end of summer. Supply shortages will become more evident next winter, the agency points out.

Capacities USA will not be enough to cover the needs of the region, although at the moment American producers already supply about 60 percent of LNG specifically to Europe, which also provokes a shortage of gas in the United States itself. But even if imports from the United States remain the same, Europe will only be able to fill gas storage facilities by the heating season of 2023-2024 by only 70 percent compared to 94 percent at present.

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The key factor in keeping gas supplies from the US to Europe at maximum levels also remains the price. If in China there will be an easing of restrictions imposed due to the coronavirus, this may increase the demand for LNG in Asia and make this market more premium compared to Europe. Then more LNG could be sent to Asia instead of Europe.

To overcome the gas crisis, “the US will need to expand its LNG export capacity and the EU will need to expand its import capacity over the next few years,” Bloomberg said, citing Rystad Energy. But now the US’s ability to increase supplies remains limited due to the failure of the Freeport LNG project in Texas, and the country will be able to increase its export capacity only in 2024 with the next wave of LNG projects, the agency concludes.

In Russia before recognizedthat Europe managed to almost completely replace Russian gas. As stated by the head Novatek Leonid Mikhelson, LNG supplies to Europe increased by 65 percent, the additional volume passing through regasification terminals reaches 43 billion cubic meters, including 29 billion from the United States. However, the additional load on the LNG market next year will be 60-70 million tons, so the next two winters will be much harder for Europeans than the current one.

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