Europe will be able to increase its LNG imports later this year, but liquefaction facilities are expanding at a slower pace, writes Auguste Breteau
Europe plans to hike its LNG import capacity by 84.6mn t/yr by the start of 2026, but global liquefaction expansions are only expected to match that rise by 2025.
Europe has 17 projects that have already reached a final investment decision (FID) or are based only on the optimisation of existing infrastructure. If completed, these would increase Europe's LNG import capacity to 278mn t/yr by 2026, 44pc higher than at present.
A cumulative 23.8mn t/yr of LNG import capacity is scheduled to come on line before the end of this year, with one floating storage and regasification unit (FSRU) to be installed in Finland, two in the Netherlands and another in Turkey.
A further four FSRUs with a combined capacity of 17mn t/yr are expected to begin operations next year. Two, chartered by Norwegian shipowner Hoegh LNG, are expected to be deployed to Germany, while the 170,000m³ Golar Tundra, purchased by Italian system operator Snam, is expected to operate at the port of Piombino, on the country's west coast, from spring 2023. Construction of Greece's planned 4.3mn t/yr Alexandropoulis FSRU terminal started in May.
Snam also secured the 170,000m³ BW Singapore, which is due to be installed near Ravenna on Italy's Adriatic coast and start operations in the third quarter of 2024, as well as the 140,000m³ Golar Arctic, which is scheduled to operate from 2025 at Sardinia's Portovesme port, as part of a Snam scheme aimed at integrating the island into the mainland gas grid.
Germany, which is not yet able to directly import LNG, has begun works on its two FSRUs as well as two onshore terminals at Brunsbuttel and Stade, which are due to begin operations by 2026. The projects would take German import capacity to an aggregate 25.4mn t/yr by 2026. German utility Uniper will charter two FSRUs from Greek shipowner Dynagas, one of which is to be developed into an onshore terminal, while green hydrogen firm Tree Energy Solutions plans to build an additional onshore terminal at Wilhelmshaven by late 2025.
FIDs have been taken on these Finnish, German, Italian and Greek projects, as well as on expansions at the 7.2mn t/yr Zeebrugge terminal in Belgium, the 14.8mn t/yr Isle of Grain facility in the UK and the 4.8mn t/yr Swinoujscie terminal in Poland, all three of which are scheduled for completion by 2026. An FID has also been taken for an FSRU with import capacity of around 4.7mn t/yr at Gdansk in Poland, due to come on line by 2028.
Import expansion to outpace exports
Europe's LNG import capacity expansions are pegged to exceed additional global liquefaction capacity until 2025, raising the question as to whether Europe will be able to secure sufficient LNG supplies to make full use of its new capacity.
Liquefaction capacity is expected to increase slowly this year and next, before rising sharply in 2024-25, when large projects such as the 14mn t/yr LNG Canada, the US' 18.1mn t/yr Golden Pass LNG and trains 8-11 at Qatar's 33mn t/yr Ras Laffan plant are scheduled to come on line (see graph). Only by 2025 will global liquefaction capacity rise above European import capacity. By 2026, 131mn t/yr of new liquefaction capacity should have come on line from the 15 LNG export projects that have reached an FID — far outstripping Europe's import capacity.
But considerable uncertainty remains over Russia's planned 19.8mn t/yr Arctic LNG 2 liquefaction project. The project might be difficult to complete under sanctions, TotalEnergies chief executive Patrick Pouyanne says. TotalEnergies' 13.1mn t/yr Mozambique project will play a key role in the company's LNG strategy, but the facility is unlikely to start in 2024 as planned, Pouyanne adds. Militant group attacks and security issues forced the firm to halt construction in 2020.
