In the race for guarantees LNG delivered in 2022 to Europe to reduce pressure on the energy market after Russian invasion of Ukraine. However, efforts to create terminals may soon come to a standstill.

From France to Poland, an area directly affected by the disruption of Russian flows natural gas, new projects are being implemented to create a suitable LNG infrastructure. Ultimately, however, infrastructure capacity could far outstrip demand after 2030, with even more European countries penetrating RES.

So, if all the planned infrastructures are actually built, it is likely that they will become obsolete only in the next few years. “If each country strives to have its own capacity, and the markets do not work together, then there will be a lot of investments that will fail,” Ogan Kose, chief executive of Accenture, commented to Bloomberg.

New LNG terminals are currently emerging in Europe. For example, Italy will soon complete the fourth installation, Germany is starting to build the fourth offshore station, and related projects are planned in Estonia and, of course, in our country.

According to the Institute of Energy Economics and Financial Analysis (IEEFA), Europe’s LNG import capacity is expected to grow by 50% within ten years. At the same time, however, most analysts predict stability or even some decline in demand. By 2030, it is expected to create a surplus of up to 250 billion cubic meters, which is more than 50% of the block’s total demand as of 2021.

Their capacity is estimated to far exceed demand after 2030.

Due to mild weather conditions, reduced demand and a large influx of LNG, there were no significant power outages in Europe last year. In fact, the level of completeness of natural gas reserves is now higher than usual.

However, LNG carriers are still arriving at a record pace to ensure sufficient supplies for next winter. For example, some days the facilities are overcrowded, leaving imported fuel in tankers acting as floating storage tanks.

For now, to cope with current demand, Europe needs to start building new LNG infrastructure. It is also noted that the terminals are not loaded at full capacity throughout the year.

However, there are concerns about the future, given that the transition to renewable energy could lead to a decrease in demand for natural gas in the EU. almost 45% by 2030. And to prevent any problems, some of the existing terminals will operate until 2045 or 2050.

The EU, however, sees additional capacity as a safety net for the energy market. At the same time, floating storage could potentially act as a means of transporting LNG to other locations if demand does decline. Finally, some of the new terminals could be used to process other products such as ammonia or hydrogen.

For her part, Esther Ang, head of LNG at Swiss-based MET International, told Bloomberg that Europe will still need LNG in 2030 and beyond. “There are more LNG projects in the world now than in the past. There will be times when these assets will be needed, and other times, perhaps with less demand – but it’s all about managing that risk,” he stressed.