Europe to ramp up LNG import facilities.
IN AN effort to limit dependence on Russia for gas imports most European countries plan to ramp up imports of liquefied natural gas from a variety of global sources.
There are currently 17 LNG import terminals operating in western Europe, plus two more in Turkey. They include two new terminals in the UK at Milford Haven that opened last year to import LNG from the huge Qatargas project. Spain has the most with six import regasification facilities. A further seven regasification plants are currently under construction in Europe, including three more in Spain.
European import capacity could more than double in the next decade according to Datamonitor. If all the plans for more terminals were to come to fruition, another 34 LNG import facilities could be built.
According to figures from Gas Infrastructure Europe, Italy alone has plans for 13 more terminals, France six and the UK four. Based on current firm plans, the share of total gas import capacity in Europe accounted for by LNG regasification capacity is expected to rise to over 30% in the next few years.
However, there are major doubts about how many of these planned facilities will actually be built or if there will be a need for them. Despite its extensive plans in Italy only one terminal is actually being built.
Datamonitor says that it remains unclear how much LNG import capacity will be needed in the coming years. While the North Sea supply is running down, new sources are being opened up in Norway and Russia has plentiful reserves and new pipelines are being built.
Sources of imported LNG come mostly from the Middle East, West and North Africa. Cargoes from Qatar have started arriving but Datamonitor says that Qatargas will only make regular deliveries to the UK from 2014.
According to statistics from Lloyd"s Marine Intelligence Unit for the final three months of 2009, some 132 LNG cargoes were discharged at north European terminals, more than half of them at two French facilities, and 188 in southern Europe, including Turkey. Spain was the major player with some 107 import cargoes, followed by Italy with 47.
North African export countries Algeria, Egypt and Libya accounted for just over half of all European import cargoes. There were 85 cargoes from the Middle East, mostly from Qatar, with some 38 shipments from West Africa, mainly Nigeria. The balance was made up by cargoes from Trinidad & Tobago.
There is currently plenty of gas available, but increasing dependence on Russia, which is widely regarded as unreliable following the 2009 Ukraine gas crisis, has prompted several European countries to look elsewhere to ensure secure gas supplies. Most major European importers that do not already have LNG import facilities are seeking to develop them, including Germany, Netherlands, Poland, Sweden and Croatia.
Datamonitor suggests that the global glut of LNG supplies up to 2015 and the growth in unconventional production in the US could put LNG terminals in a position to challenge pipelines on a price basis as well as in terms of security, especially if Asian import demand remains limited due to lack of regasification infrastructure.
European gas pipeline capacity is set to increase significantly in the next few years as new routes come on stream. Datamonitor figures put total EU pipeline import capacity at 491 billion cubic metres per year this year, rising to 531 BCM per year in 2012 with another big jump to 578 BCM per year in 2015.
The sufficiency of gas pipeline capacity and limited demand growth for gas suggests that it is unlikely that all the LNG import terminals that are currently planned will be needed or built, Datamonitor says.