Europe could spark global scramble for natural gas, Bloomberg
Date: 2025-01-13 Author: Кирило Загоруйко Categories: ECONOMY
The world is bracing for a scramble for natural gas supplies. That would raise bills for consumers in Europe, while poorer countries from Asia to South America could lose access to the market.
Bloomberg reports that Europe is at risk of missing its gas reserves target for next winter for the first time since 2022. Supply sources have been cut after Ukraine refused to renew its contract for Russian gas transit.
To meet projected demand, Europe would have to import an additional 10 million tonnes of LNG a year, about 10% more than in 2024, according to Saul Kavonic, an energy analyst at MST Marquee in Sydney. That would mean European countries would be diverting some supplies from Asia.
Depending on how demand evolves, competition could push prices higher than countries like India, Bangladesh and Egypt can afford. The same is true in South America.
Egypt is also at risk. Last year, the country surprised the market by turning from an LNG exporter to an importer amid summer power outages, pushing purchases to their highest level since 2017. It may still need additional supplies this year to weather the summer heat.
For LNG sellers, that creates an opportunity. The outlook depends largely on how quickly new production capacity comes online. Growth was muted last year as Egypt halted exports and Russia’s newest plant, Arctic LNG 2, is blocked by U.S. sanctions, according to Laura Page of energy data firm Kpler.
That puts the U.S. in the spotlight. U.S. LNG exports are expected to grow about 15% this year, thanks to higher output from Venture Global LNG Inc.’s Plaquemines and Cheniere Energy Inc.’s Corpus Christi fields. But the pace is in question. Cheniere has already warned that production ramp-up this year will be “relatively slow.”
In Russia, which is still Europe’s second-largest source of LNG, attention will be on whether the country can maintain its exports amid Western sanctions.
For now, Asia has enough headroom to give Europe a leg up on LNG supplies. Chinese LNG importers are reselling cargoes due in March and buying less on the spot market, where prices are high. Indian gas importers have turned to cheaper alternatives, and Bangladesh was forced to adjust purchasing tenders after prices proved too high. Egypt has turned to gasoil.
But relief is on the horizon. Starting in 2026, the delayed projects are set to finally begin shipping fuel. By 2030, another 175 million tons of the new fuel will begin shipping, mostly from the U.S. and Qatar, which could lower prices and bring buyers back to countries that were squeezed out of the market this year.
