Wednesday 1 November 2023

Europe’s LNG supply faces pressure from China and rising prices

Europe’s LNG supply faces pressure from China and rising prices

Europe's liquefied natural gas (LNG) supply faces challenges due to increased competition from China and rising prices in the gas market.

That's according to a new report from Cornwall Insight, which suggests China's growing gas demand, linked to its post-Covid-19 economic recovery, could intensify the battle for LNG resources.

The report indicates that global LNG supplies are expected to see only minimal growth until 2025.

This, combined with global events causing wholesale price spikes, raises concerns about Europe's vulnerability to gas shortages in the coming winter and beyond.

Europe's efforts to diversify away from Russian pipeline gas, particularly after the Russian invasion of Ukraine, saw LNG imports bridging a substantial part of the gap.

Last winter's milder weather and high gas prices reduced demand across the continent, helping to maintain gas supply security.

However, China's 6% growth in gas demand in 2023, though currently met by domestic production and increased pipeline imports from Russia, might lead to greater LNG imports during the winter, increasing global competition, according to the energy consultancy.

Written by

Sumit Bose

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