Europe is increasingly relying on the supply of liquid gas. A second terminal is now to be built in Greece.
(Photo: Reuters)
Berlin, Brussels, Tokyo In the midst of the gas crisis in Europe and declining gas supplies from Russia, the number of liquid gas terminals is increasing in Europe: Greece has now announced that it will build a second LNG landing point in Alexandroupolis.
The plant, which is scheduled to go into operation by the end of 2023, will be built with 167 million euros in government subsidies, including from the EU. Chancellor Olaf Scholz (SPD) is now also supporting plans to build “one or more” LNG terminals in Germany, government spokesman Steffen Hebestreit said in Berlin on Monday.
As a result, plans for greater diversification of Europe’s gas supply are gaining momentum. And liquefied natural gas, cooled to minus 160 degrees in special tankers, is playing an increasingly important role. According to the industry association Gas Infrastructure Europe, a new delivery record was set in January with more than ten billion cubic meters of LNG.
One of the reasons is that gas prices in Europe have risen sharply, while they have fallen in Asia. Gas prices in Asia are traditionally higher than in Europe, where natural gas transported through pipelines dominates. Asia has therefore so far been more attractive for the more expensive LNG. But even with the record delivery, only 71 percent of the existing European LNG terminals have been used so far – especially since only 13 and 21 percent of the maximum deliverable quantity has been landed in the facilities in Lithuania and Poland.
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That could change shortly: the risk of a Russian gas embargo against Europe is taken extremely seriously in Brussels. In order to avert possible fatal consequences, an emergency plan for the European energy supply is being drawn up together with the USA.
Daily talks by top EU officials with Washington
Every day, top officials from the EU Commission connect with experts from the National Security Council in Washington via tap-proof connections. There is, say insiders, a kind of “dedicated line” between Commission President Ursula von der Leyen’s closest associates and the US government’s foreign policy strategists: to Amos Hochstein, the State Department’s special envoy for energy security, and Jake Sullivan, President Joe’s security adviser biden
“The United States and the EU are working together to ensure continued, sufficient and timely supplies of natural gas to the EU from various sources around the world to avoid supply shocks, not least from another Russian invasion of Ukraine.” Leyen and Biden recently issued a joint statement.
The USA is also so committed to the EU’s security of supply because it identified Europe’s dependence on Russian energy imports as an obstacle to negotiations with the Europeans about deterrent threats of sanctions against Moscow. The more dependent individual EU states are on Russian natural gas supplies, the less willing they are to react decisively to a Russian attack on Ukraine.
Biden wanted to receive the Emir of Qatar, Tamim bin Hamad Al Thani, in the White House on Monday evening. Qatar is one of the leading LNG exporters but has long-term supply deals with Asian customers. The heads of state in Washington wanted to discuss the extent to which LNG can now be diverted to Europe.
Japan as one of the largest LNG importers
China, Japan, South Korea and Taiwan in particular import large quantities of LNG. As one of the largest consumers of LPG in the world, Japan has built up large inventories. After the gas shortage almost caused power outages in early 2021, the energy suppliers filled the reserve particularly well. In November, about 70 percent more than required (reserves for 52 days) were stored in the tanks.
Europe’s gas crisis is being exacerbated by a significant drop in Russian natural gas supplies: Gazprom had committed to pumping an average of 109 million cubic meters of natural gas through Ukraine every day, but only put through 53 million in the first half of January. According to the Ukrainian pipeline operator GTSU, the state-controlled Russian group did not book additional transit capacities offered by Ukraine.
The Yamal Pipeline, which runs through Poland, is no longer used at all. Gazprom says it exported 5.4 billion cubic meters by January 15, 41.1 percent less than a year ago to countries that are not successor states of the Soviet Union. This is the lowest level since 2015. More recent official figures are not yet available. Meanwhile, Gazprom’s gas production increased by 2.1 percent.
More: How liquid gas terminals want to go green.