Europe Can See a World Flush with LNG From the US, #Qatar - Bloomberg

Europe Can See a World Flush with LNG From the US, Qatar - Bloomberg

For the second straight winter, Europe’s energy strategy is based largely on hopes for mild weather and reduced industrial demand, with gas prices still hovering at about 50 euros ($53) per megawatt-hour, more than double the average in the decade before Vladimir Putin’s invasion of Ukraine.

But it’s not too soon to begin imagining — and planning for — a less desperate future: instead of a world of scarcity, one of abundant liquefied natural gas supplies provided by the US and Qatar.

For that, however, things must go as exactly as planned. And after two years of rolling crisis, the wording “as planned” carries a lot of weight. There’s hope, but, for at least the next year and a half, it’s just that: hope.

“Starting in 2025, an unprecedented surge in new LNG projects is set to tip the balance of markets and concerns about natural gas supply,” the International Energy Agency said this week, echoing a view that’s gaining traction in the market. “A wave of new LNG export projects is set to remodel gas markets.” Fatih Birol, the head of the agency, went even further: “The gas market will move into the direction of buyer’s market.”

Unlike gas pipelines, which physically connect buyers and sellers, LNG export terminals super-cool gas into a liquid form, before loading it onto massive ships. Each terminal takes years to build and costs several billion dollars. At the other end of the chain, an LNG regasification terminal is needed before the commodity is shipped via domestic pipeline to the final customer.

LNG is critical to balance the European gas market since buying Russian gas via pipeline, which before the invasion of Ukraine accounted for more than a third of the continent’s imports, is out of the question. Other pipelines, from the likes of Norway and Algeria, are already maxed out. Anders Opedal, the boss of Norway’s Equinor ASA, put it succinctly at a recent energy conference: Everyone is trying to boost production, but, ultimately, “Europe will depend on LNG supply.”