The EU has, for the first time, imported more Liquified Natural Gas (LNG) in a month than they have received pipeline gas from Russia. Russia’s reductions in pipeline supply combined with European fears of failing to have enough gas in storage to supply their demand in winter, to increase imports of LNG from America beyond the Russian volumes delivered in June.
Fatih Birol, Executive Director of the International Energy Agency (IEA), said, “Russia’s recent steep cuts in natural gas flows to the EU mean this is the 1st month in history in which the EU has imported more gas via LNG from the US than via pipeline from Russia. The drop in Russian supply calls for efforts to reduce EU demand to prepare for a tough winter.”
Now Russia’s reduced delivery volumes will be combining with an upcoming, scheduled, two-week shutdown of the Nord Stream pipeline for regular maintenance in July. That is predicted to leave Europe scrambling for additional LNG shipments as they try to meet storage capacity requirements necessary to supply their populations with heat and electricity for winter.
Although the EU has been importing more US LNG than ever before, experts point out, US LNG shipments cannot make up entirely for the Russian shortfall. Experts point out European nations are going to have to take measures to conserve gas supplies.
Birol has said as much, tweeting, “Recent disruptions to natural gas supplies, notably Russia steeply cutting flows to EU countries, is set to remove around 35 billion cubic metres of gas from the market this year, posing big challenges to efforts to refill storage. This is a red alert for the EU for next winter”
Germany has already begun opening up previously shuttered coal-fired electrical generation capacity, to reduce usage of gas for electricity now, allowing more to be shunted into storage.
That said analysts have noted that presently storage capacities are slightly above this time last year. Although it is unclear if the increased volumes on tap allowed Europe to maintain a lower storage level during this period, and top off the storage must faster later in the year.
