IEA: LNG imports to Europe to rise by 25 percent this year, nearing record levels

Imports of liquefied natural gas (LNG) to Europe are expected to rise by 25 percent this year, or 33 billion cubic meters, as the continent needs to offset lower pipeline gas supplies and weather-related demand has increased. Imports will thus approach a record level. This is according to an estimate published today by the International Energy Agency (IEA). Imports fell last year, by contrast.

Lower pipeline supplies from Russia, higher domestic demand, the need to refill storage facilities and increased gas exports from the EU to Ukraine are contributing to the rise in LNG imports. In the first quarter, LNG imports to Europe rose by 23 percent, or more than nine billion cubic meters.

This year’s expected trend contrasts sharply with last year, when LNG imports to Europe fell by 18 percent, or almost 30 billion cubic meters. It also illustrates how quickly the global gas market is changing, the IEA said.

At the end of winter, the European Union’s storage facilities held just 35 billion cubic meters of gas. They were therefore 34 percent full. Countries must fill them to 90 percent before winter. Compared with last year, this means the EU will need almost 20 billion cubic meters more gas to refill storage facilities by the beginning of November, an increase of 50 percent, the IEA estimated.

The IEA expects gas demand in Europe to rise by 1.5 percent year on year this year. The increase is driven by rising demand from households and the commercial sector. However, demand for gas-fired power generation is expected to fall by ten percent year on year, as renewable energy continues to expand.

Industrial gas consumption is expected to decline through the end of the year, as higher gas prices are likely to weigh on energy- and gas-intensive industries, the IEA said.