European LNG imports surge

European LNG imports spiked in January-May this year on the back of high gas prices and as European countries look to slash reliance on Russian gas pipeline supplies.

Europe’s (the European Union and the United Kingdom) LNG imports set an all-time historical record high in April 2022, averaging 16.5 billion cubic feet per day (Bcf/d) monthly and exceeding 19 Bcf/d on some days in April, according to a report by the US Energy Information Administration.

LNG imports increased in 2022 because natural gas storage inventories were at historically low levels from fall 2021 through spring 2022, the agency said.

Traditional sources of natural gas (and some substitute fuels) delivered by pipeline have not been meeting Europe’s energy needs, and spot natural gas prices at major European hubs have generally been higher than spot prices in other markets, it said.

The higher spot prices in Europe have resulted in more imports from suppliers with destination flexibility in their contracts, particularly from the US.

During the first four months of 2022, the US exported 74 percent of its LNG to Europe, compared with an annual average of 34 percent last year, EIA previously said.

From January through May 2022, LNG imports into the EU and the UK averaged 14.9 Bcf/d, EIA said, citing data from Cedigaz.

This is 5.9 Bcf/d or 66 percent more than the annual average in 2021 and 4.7 Bcf/d more than the pre-pandemic high of 10.3 Bcf/d in 2019, according to Cedigaz data.

European LNG imports surge
Data source: Cedigaz
Note: Others includes Poland, Lithuania, Croatia, Greece, Finland, Sweden, and Malta. Europe refers to the 27 countries of the European Union and the United Kingdom.

LNG terminal utilization varies

Currently, 14 countries in Europe have LNG import facilities; however, utilization of these facilities varies by region, EIA said.

The northern and southern parts of the European natural gas pipeline grid are not fully integrated.

However, a more fully integrated pipeline grid, which can transport large volumes of natural gas to major load centers and storage facilities across Northern Europe, links LNG import terminals in Northwest Europe.

Also, LNG import facilities in Southern Europe primarily serve local and regional markets, the agency noted.

From January through May 2022, deliveries of regasified LNG to the pipeline grid in Spain, Portugal, and Italy in Southern Europe averaged 4.6 Bcf/d.

LNG import terminals in the region reached a 58 percent utilization rate during the period, it said.

During the same period, volumes of regasified LNG delivered to France, Belgium, and the Netherlands in Northwest Europe averaged 5.8 Bcf/d, exceeding the nameplate capacity of regasification facilities and reaching an all-time peak utilization of 115 percent in April 2022, EIA said.

Further increases in LNG imports limited

Utilization rates of regasification terminals can exceed the standard nameplate capacity of 100 percent during periods of peak use.

Further increases in LNG imports into Northwest Europe would be limited by the availability of regasification capacity in the region, the agency said.

The UK has the second-largest LNG regasification capacity in Europe (4.7 Bcf/d), and it can export up to 2.5 Bcf/d of natural gas to the EU via the Interconnector pipeline into Belgium and the BBL pipeline into the Netherlands.

Regasified LNG volumes in the UK averaged 2.9 Bcf/d from January through May 2022, and regasification facilities ran at a 63 percent utilization rate, up from 30 percent last year, EIA said.

Exports from the UK via interconnecting pipelines to the European Union have run at close to maximum rates since March 2022, it said.

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