BAKU, Azerbaijan, May 19
By Leman Zeynalova – Trend:
If gas consumption in Europe is assumed to rise back to 2019 levels – which were higher than 2018 as a result of the coal-to-gas switching in power – then with 55 bcm of storage injection there is room for 55 bcm of LNG imports, similar to 2019 and 2020 levels, Trend reports with reference to the Oxford Energy Institute.
“As a reminder, European LNG import volumes were very high in April and May 2020, before falling sharply for the rest of the summer. LNG imports could be significantly higher if pipeline imports were lower – for example if Russian volumes were lower – and if more gas was injected into storage. In April, there was very little net injection into storage, so a 55 bcm injection in the summer from May to October, would require injections to average at least 9 bcm a month – most likely less in May and September-October, and closer to 10-12 bcm in the June to August period,” the Institute said in its latest publication.
LNG imports are seasonal with higher volumes in the northern hemisphere winter months, so more unused capacity is usual in the summer, reads the report.
“Asia is the key demand centre for LNG and the underlying assumption in the figure above is for a 7 per cent increase year on year (a rise of around 11 bcm) driven by higher volumes in China and all other Asian countries, including India, except for Japan, Korea, Taiwan, where volumes are slightly lower. Other markets have slightly lower volumes and European LNG imports are at 55 bcm – marginally lower than in 2020. This leaves the level of unused export capacity at a similar percentage to 2020, when the market saw shut-ins of significant volumes of LNG, especially from the US. Clearly higher demand from Asia or even other markets could soak up some of the excess capacity but more LNG could also go into Europe to fill up storage. If an extra 10 bcm were imported into Europe – around 100-120 cargoes – then the unused capacity percentage would be at a similar level to 2019. In 2022, rising demand, especially in Asia, reduces the level of unused capacity.”
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