Demand for liquefied natural gas (LNG) in Europe is rising due to a decrease in imports from Asia and increased seasonal demand. According to reports, LNG imports to Asia in September 2023 are estimated to be 20.09 million tons, down from 22.27 million tons last year and 22.25 million tons last month.
Increase in LNG Imports in Europe
Meanwhile, LNG imports in Europe have reached 7.98 million tons this month, and it is expected that this figure will rise to 10.53 million tons in October. This increase comes as the level of natural gas reserves in the European Union is significantly lower than the five-year average for this time of year.
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Supply and Price Challenges
LNG prices reached $26 per million British thermal units in the week ending September 11 and do not seem likely to decrease soon. As Qatar's LNG export center is closed due to supply issues, QatarEnergy is seeking contracts to supply liquefied gas from the United States until 2031. Meanwhile, the United Arab Emirates is also addressing part of its needs from the Gulf, but this amount is insufficient.
The reduction in LNG supply due to force majeure conditions in Qatar is estimated at 12.8 million tons per year. Despite hopes for increased new capacities in the United States, this supply will not materialize soon, and this situation has become a challenge for gas importers on the brink of winter.
In Asia, China, like in previous years, has limited LNG imports and relies on long-term contracts and fixed prices. This action by China has helped mitigate the effects of the Qatari gas shortage for other countries. Countries unable to purchase LNG from the Spot market are turning to coal and other electricity generation sources.
Currently, European countries are making significant efforts to purchase as much LNG as possible, even as prices rise. It is expected that their annual imports this year will exceed last year's record of 125.20 million tons.
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