Europe Seeks Record Spike in LNG Imports in Nov.

Europe in November imported 302 Bcf of liquefied natural gas (LNG) cargoes, or 52 Bcf more than the previous record volumes imported two months earlier, according to Houston-based LNG monitoring and analysis firm Waterbourne LNG.

Europe typically sees LNG imports spike during the fall and winter months. The seasonal increase in imports to Europe, coupled with new Qatari-backed LNG terminals in Italy and the UK that are receiving significant amounts of Qatari gas and dearth of U.S. LNG import demand due to the U.S. shale gas boom, means that more LNG is being delivered into Europe.

Europe's LNG market is reaching the point now where they won't be able to take any more gas, said Steve Johnson, president of Waterbourne LNG. "It would appear we're getting into a disposal issue" for LNG, especially for Qatari-volumes of LNG. Waterbourne said in an October report that 22,441 million metric tons of LNG had been imported from Qatar to Europe, the most of any country importing LNG into Europe, with Algeria and Nigeria a distant second and third.

The most significant contributor to Europe's spike last month in LNG imports was the UK, which imported 73 Bcf of LNG, setting a new record for the largest single import month ever for the UK. The country imported approximately 376 Bcf of LNG in 2009, and is expected to import close to 700 Bcf of LNG this year. This influx of additional LNG has displaced some gas pipeline volumes, including Norwegian supply that normally goes into the UK, and is backing up some Russian LNG import supply, Johnson said.

Despite labor strikes in October that temporarily halted the unloading of LNG cargoes at France's three LNG terminals, LNG imports into France increased during 2010 to approximately 504 Bcf from 475 Bcf in 2009, while LNG imports into Italy jumped from 111 Bcf in 2009 to 323 Bcf in 2010. Johnson attributed to increases to new Qatar-backed LNG terminals coming online in those countries.

The push to utilize more gas-fired power generation in Spain, Portugal, and the UK has had a significant impact on LNG demand in those countries, said Charles Martin, analyst at Waterbourne LNG. LNG imports into Spain in November totaled approximately 83 Bcf, down slightly from November 2009, but the country's LNG imports for 2010 are expected to total 991 Bcf, up from 964 Bcf of LNG imports in 2009, the largest amount of imports for a European country in 2010.

Portugal imported approximately 9 Bcf of LNG imports last month, up from the approximately 6 Bcf of LNG imports in November 2009. Portuguese LNG imports for 2010 are expected to total approximately 114 Bcf, up from the 100 Bcf of LNG imports in 2009. Greece and Turkey also recorded increases in LNG imports from 2009 to 2010; only Belgium has seen a slight decline in its LNG imports from 2009 to 2010.

While drilling technology has unlocked U.S. shale gas and created a production boom, European shale gas will probably not have a significant impact on European LNG imports until the end of the decade. "It is too early to come up with a reasonable estimate on what its eventual impact will be on European LNG imports," said Martin.


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Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
John B. Ashmun | Dec. 29, 2010
I have a question prior to making a comment, and it regards the economics of LNG use. What is the price of LNG landed in Europe, and how does it compare with natural gas? THANK YOU.


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