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Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

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Over Half Of Europe’s LNG Capacity Could Become Stranded By 2030

  • Europe could see more than half of its LNG import capacity become stranded by 2030 as its current buildout plans are set to exceed demand.
  • Europe’s current buildout plans suggest that its LNG terminal capacity could exceed 400 billion cubic meters by 2030, up from 270 billion cubic meters.
  • Demand for LNG in 2030 is expected to range between 150 billion cubic meters and 190 billion cubic meters.

More than half of Europe’s LNG import capacity could become stranded assets by 2030 as current LNG buildout plans are set to vastly exceed projected demand for liquefied natural gas by the end of the decade, the Institute for Energy Economics and Financial Analysis (IEEFA) said in a new analysis this week.

The EU is boosting its LNG import capacity and is ready to welcome even more LNG cargoes this year and in the coming years, Maros Sefcovic, European Commission Vice President for Interinstitutional Relations and Foresight, said earlier this month. The EU is getting ready for more LNG by reinforcing its import capacity infrastructure, Sefcovic added.

Current infrastructure buildout plans suggest that Europe’s LNG terminal capacity could exceed 400 billion cubic meters by 2030, up from 270 billion cubic meters at the end of 2022, IEEFA said in its report.  

However, demand for LNG by 2030 will range between 150 bcm according to IEEFA forecast, and 190 bcm according to S&P Global Commodity Insights forecast, the analysis showed.

By 2030, IEEFA forecasts a 36% utilization rate of Europe’s LNG terminals, including those that are currently being planned and being built.  

Spain, Turkey, the UK, France, Italy, and Germany are at the highest risk of seeing stranded LNG infrastructure assets in 2030, the analysis showed.  

“This is the world’s most expensive and unnecessary insurance policy. Europe must carefully balance its gas and LNG systems, and avoid tipping the scale from reliability to redundancy,” said Ana Maria Jaller Makarewicz, author of the analysis and Energy Analyst for IEEFA Europe.

“Boosting Europe’s LNG infrastructure will not necessarily increase reliability—there’s a tangible risk that assets could become stranded.”

“Decisions to expand Europe’s LNG infrastructure must be based on future demand needs, and take into account that the EU is planning to reduce gas demand by at least one-third by 2030,” the analyst added.

By Tsvetana Paraskova for Oilprice.com

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Leave a comment
  • Kay Uwe Boehm on March 22 2023 said:
    Investment needed also for more CNG consumption over 2.4rm container size peble tank system placed and exchanged at fuel stations delilering also 700+ bar double dense CYG filsble at nect LNG terminal and car gasolime tank with CNG cylinders inside also CNG for bus, truck, diesel train and airplane with tank in middle inside.
  • Mamdouh Salameh on March 22 2023 said:
    The EU is muddled about its energy policy. It commits one mistake after the other. In January 2021 it plunged itself in a disastrous energy crisis because of its hasty green policies aimed at accelerating energy transition to renewables at the expense of fossil fuels for which it has paid a heavy price.

    Now the EU is going to commit another mistake by planning to expand its LNG import capacity to 400 billion cubic metres (bcm) by 2030 when its projection is that it only needs to import 150-190 bcm by then. Moreover, it already has an LNG import capacity of 270 bcm enough to cover its needs beyond 2030.

    Furthermore, the EU economy can’t afford to cover the bulk of its gas needs with LNG imports since LNG is far more expensive than piped gas. It will impose a very heavy burden on European economies.

    Europe’s economies led by Germany’s were built on cheap and plentiful Russian piped gas since the 1960s which is far cheaper than LNG. That is why I expect the EU to resume importing Russian piped gas within the next two years either via repaired Nord Stream 1 and Nord Stream 2 gas pipeline or via TurkStream pipeline from Turkey.

    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert
  • Jon Davies on March 22 2023 said:
    Planning to reduce gas usage and actually doing so are two very different things. Smart people are planning for reality not r elying on wishful thinking. And there are also requirements after 2030 to consider as well.

Leave a comment




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