Last year, the European Union (EU) witnessed a significant increase in its demand for liquefied natural gas (LNG) as the bloc sought to compensate for the loss of pipeline supplies from Russia. Data from the Energy Institute (EI) reveals that European pipeline gas imports in 2022 amounted to approximately 151 billion cubic meters, a drastic drop from the 232 billion cubic meters recorded the previous year, marking a 35% year-on-year decline. In contrast, the import of LNG soared to a total of 170 billion cubic meters in 2022, compared to 108 billion cubic meters in the preceding year. To achieve this substantial increase in imports, the EU had to construct import terminals dedicated to LNG.
According to Nick Wayth, the CEO of the London-based EI, the conflict in Ukraine disrupted assumptions about global supply, resulting in a price crisis and significant cost-of-living pressures across several economies. Therefore, in response to these challenges, the EU intensified efforts to reduce its energy dependence on Russia early last year, incorporating them into its sanctions policy. As part of these actions, the EU has already prohibited Moscow’s seaborne oil deliveries and joined the Group of Seven (G7) countries in imposing a price cap on Russian crude. Consequently, Russian gas deliveries to the EU plummeted to record lows due to Ukraine-related sanctions and sabotage targeting the Nord Stream pipelines. Consequently, the EI report confirms that Norway has become the EU’s largest gas supplier.
In the quest to compensate for the decline in Russian pipeline gas, the EU has significantly increased its imports of LNG, including from Russia itself. In fact, data from the Brussels-based economic think tank Bruegel reveals that the EU’s LNG imports from Russia in 2022 reached a three-year high, totaling 19.2 billion cubic meters.
This shift in the EU’s energy import patterns reflects the bloc’s determination to diversify its sources of energy supply in order to reduce its reliance on Russia. By bolstering LNG imports, the EU aims to enhance energy security and diminish the vulnerability caused by geopolitical tensions or disruptions in specific supply routes. However, this transition also presents its own set of challenges, with the need to invest in infrastructure, such as LNG import terminals, and develop new trading relationships.
Overall, the EU’s increased appetite for LNG in 2022 can be attributed to the loss of pipeline supplies from Russia and the subsequent efforts to diversify energy sources. This shift has significant implications for Europe’s energy security, economic stability, and geopolitical relations.
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