BAKU, Azerbaijan, July 20. At the maximum, and assuming gas prices remain at current levels, the estimates of the International Monetary Fund (IMF) suggest that alternative sources of energy could replace around 80 bcm of Russian gas in 2022, (and even more over the next 12 months) largely through higher LNG imports, Trend reports.
IMF says in its latest report that higher non-Russian pipeline flows could provide some additional gas, perhaps 15 bcm during 2022. While there is substantial excess capacity in non-Russian pipelines, production constraints would limit the magnitude of additional flows from Norway, Africa, and Azerbaijan to about 10 bcm this year (assuming modest increases in production). The scheduled completion and early operation of The Baltic Pipe linking Norway and Poland in Q4-2022 will bring an additional 10 bcm in 2023.
“Sustained high LNG imports could provide around 55 bcm more in gas in 2022. Higher LNG imports early this year are likely to continue. The seasonally lower demand pull in the summer—which would reduce LNG imports versus recent levels—is likely to be partly offset by mandates to refill storage. A number of factors instill a notable degree of uncertainty around this estimate, including competition from Asia, summer maintenance needs for LNG terminals and vessels as well as the timing of US export capacity expansions.
Given the structure of the LNG market, this higher level of LNG imports would likely need LNG prices to remain at or near the high levels of the past months. In the coming winter LNG capacity will be expanded slightly, allowing LNG imports to rise further in H1 2023. A recently announced agreement between the EU, Israel and Egypt could modestly increase EU LNG imports this year and next year, with more significant volumes expected thereafter. Expansion in LNG export capacity would require long-term contracts with customers,” reads the report.
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