Thursday, 24 February 2022 13:39

Little prospect for Europe to reduce its dependence on Russian gas in the short term, says GlobalData

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Following the news that Russia has invaded breakaway territories in Ukraine;

Veronika Kustkova, Senior Oil & Gas Analyst at GlobalData, a leading data and analytics company, offers her view:

2017 04 20 114457“With Nord Stream 2 coming to a halt, Germany will be losing the additional 150 million cubic metres per day of gas coming from the envisaged pipeline. Gas transit through Ukraine currently holds a yearly capacity of over 100 billion cubic metres (Bcm). As the crisis unfolds, the massive gas imports route via Ukrainian trunk pipelines may stop at any point. This brings an immediate threat to Europe while withdrawals from gas storages continue to rise, but it is doubtful they’ll reach 2018 historical lows.

“European demand for gas has increased since 2020 and is expected to stay at the same level in the short term, placing Europe in an uncomfortable position as Qatar has already declared they will not be able to fulfil the supply shortage. According to Eurostat and GlobalData analysis Russian imports made up 45% of EU imports in the first 10 months of 2021. Similarly, Russian gas exports are reliant on Europe and Turkey, which made up around 78% in 2021 despite increasing volumes going to China.

“An alternative source of gas is US LNG imports, but volumes will be constrained by capacity. However, medium-term increases will depend on new projects with the likes of the Rio Grande, which has already seen a delay. However, in the past two months we have seen the US LNG imports to Europe taking over from Russian pipeline gas for the first time in history. Another offset could be from wind and solar, but we will only see a substantial 7% increase in the European energy mix in 2025.”

About GlobalData

4,000 of the world’s largest companies, including over 70% of FTSE 100 and 60% of Fortune 100 companies, make more timely and better business decisions thanks to GlobalData’s unique data, expert analysis and innovative solutions, all in one platform. GlobalData’s mission is to help our clients decode the future to be more successful and innovative across a range of industries, including the healthcare, consumer, retail, financial, technology and professional services sectors. 

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