Chronicle of raw materials

Can LNG replace Russian gas?

Audio 01:43

An LNG (liquefied natural gas) tanker arrives at a port in Yokohama, southwest of Tokyo, Japan.

(Illustrative Image) © AP - Koji Sasahara/File Photo

By: Marie-Pierre Olphand Follow

2 mins

To reduce their dependence on Russian gas, more and more countries are looking towards liquefied natural gas.

But the available LNG volumes will not be enough to meet demand.

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50 billion m3 of additional LNG.

This is what Europe would like to import by the end of the year.

From January to April, European imports have already increased by 56% compared to last year, with a main supplier the United States.

Bulgaria, to which Gazprom cut off the tap, is currently in negotiations to buy liquefied natural gas from the United States and Egypt.

Germany, for its part, has leased four floating storage and regasification units in order to be able to increase its LNG import capacity.

European import terminals are generally used at full capacity, to such an extent that certain maintenance operations have been postponed.

Insufficient supply in the face of booming demand

But Europe will not be able to continue importing at the level of the start of the year: the volumes of LNG expected on the market are lower than demand.

“

 ”, specifies an expert.

And they have, in part, already been the subject of a contract.

Importing will be all the more complicated as Europe is in competition with Asia, which is also seeking to buy LNG.

This faster-than-expected growth in demand, faced with a supply that is not up to par, is indicative of a structural deficit according to the players in the sector.

As a result, prices are driven up and volatility is increasing, according to the latest report from the International Liquefied Natural Gas Importers Group.

The battle to buy LNG could have another consequence, underlines Vincent Demoury, general delegate of GIIGNL: it could attract cargoes to countries with high purchasing power, and which therefore pay more, to the detriment of countries like Bangladesh. or Pakistan, which would then be forced to replace these volumes with coal or oil.

This would then affect the pace of their energy transition.

The solution to replace Russian gas in the long term will therefore in no case be based on LNG alone.

According to experts, it will at some point also have to go through a reduction in demand from individuals and manufacturers.

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