LNG Import Terminals and Energy Security in Europe 

There are currently 24 LNG import terminals including 6 small-scale LNG terminals that are operational in the European Union. This includes 7 in Spain, 4 in France, 3 each in Italy, the UK, and one each in Belgium, Greece, Portugal, Netherlands, Poland, Malta, and Lithuania

In the last few decades, natural gas has gained wide acceptance as a clean source of energy. The non-toxic nature and reduced carbon dioxide emissions mean that gas has taken the position of the cleanest, as well as the most abundant and viable source of energy on the road to a completely renewable future. While gas pipelines are limited by the distances they can traverse, the growing number of LNG import terminals is making it possible for Europe to tap into gas reserves around the world.

In the 1960s, gas was discovered in the fields in the Netherlands, off the coast in the UK and another major reserve was discovered in Norway in 1970. This was the beginning of natural gas becoming popular in Europe. Even half a century ago, pipelines were bringing in gas from Russia. Transporting gas as LNG was seen as a viable alternative. However, the technologies to regassify were still expensive. The advent of technology and political will to diversity the gas supply has now given rise to renewed interest in LNG terminals across Europe. 29 LNG terminals exist in Europe currently, and another 6 are being built and as many as 22 are being planned or considered.

Why is natural gas so important for energy security in Europe?

Natural gas accounts for about 25% of the European Union’s total energy consumption.

As domestic production of gas accounts for less than 30% of its total demand, it is clear that ensuring an uninterrupted and resilient supply of gas at all times is important to the EU’s energy security.  LNG is crucial not just for power generation and industry, but also for residential and commercial heating. 26% of LNG consumption in Europe is for power generation, 23% in industry and the rest is used for heating.

In 2019 alone, European Union states imported 108 billion cubic meters of LNG worth 16.2 billion Euros, recording a growth of approximately 75% over 2018. This accounted for over 21% of the global LNG supply.

In 2019 alone, European Union states imported 108 billion cubic meters of LNG worth 16.2 billion Euros, recording a growth of approximately 75% over 2018. This accounted for over 21% of the global LNG supply.

Source:European Union, https://ec.europa.eu/eurostat/cache/infographs/energy/bloc-2a.html

Spain was the biggest importer in the EU, followed by France, the UK, Italy, Netherlands and Belgium. The imports were mainly from Qatar (28 %), Russia (20%) and the USA (16%).

Development of LNG import terminals is not just an energy policy matter, but also a sensitive Geo-political matter.

Ensuring access to LNG for all its member states is one of the key objectives of the EU’s  Energy Union strategy. As the majority of Europe’s energy needs is catered by imported fossil fuels, it’s vital that Europe achieves diversification of suppliers. The EU bets on LNG to satisfy its gas needs as liquid markets and LNG import terminals are less prone to supply interruptions as compared to a supply of gas from a single source. Even though Europe has a significant infrastructure for importing LNG, the South-East, Central-Eastern and the Baltic regions are heavily reliant on gas pipelines from Russia and will be severely impacted if there is a supply crisis. The European Union’s classification of certain LNG Import projects as ‘Projects of Common Interest’, and making them eligible for EU funding is a clear indication of its seriousness in achieving this objective. The EU’s strategy is to increase the gas reserves of its member states, connecting the gas networks in the region and diversifying its supply.

Even though the European Commission has committed to reducing dependence on gas from Russia, Russia remains one of the key suppliers of gas to Europe. The abundance of LNG in the market due to the shale revolution in the USA that started in 2011 has helped the EU diversify its supply. The waters became even more murkier after the US sanctions against development of Nord stream 2 that aims to double the gas supply to Europe from Russia. European countries are largely divided in supporting and opposing the project.

In January 2020, the US was the top supplier of LNG to the EU, overtaking Russia and Qatar.

The current state and future plans 

There are currently 24 LNG import terminals including 6 small-scale LNG terminals that are operational in the European Union. This includes 7 in Spain, 4 in France, 3 each in Italy, the UK, and one each in Belgium, Greece, Portugal, Netherlands, Poland, Malta, and Lithuania. In addition to these, there are about 22 large-scale LNG import terminals being considered or planned in Europe. The ones planned in Greece, Italy, Poland, UK and Turkey will add to the existing regasification capacity in these countries. Very much in line with European Union’s objective of increasing energy security, 13 of the planned terminals in Albania, Croatia, Cyprus, Estonia, Germany, Ireland, Latvia, and Romania respectively will become the first large-scale LNG terminal projects in these countries. The terminals planned in Albania, Croatia, Cyprus, Germany, Greece, Ireland, Poland and the UK are FSRUs. There are also plans for expanding the capabilities and capacity of existing terminals.

Source: Gas Infrastructure Europe https://www.gie.eu/download/2018/GIE_Brochure_The_Benefits_and_Role_of_LNG_in_Europe_January2018.pdf

As Europe invests more into achieving energy security through a robust network of LNG import terminals, we aim to connect the key stakeholders in the development of LNG terminals in Europe to discuss common challenges, future projects, technologies, and alternatives to ensure energy welfare regardless of the political or economic situation. Join us for the virtual forum on Development of Europe’s LNG Import Terminals (16-17 July) bringing together experts, decision and policymakers.