European LNG Imports on the Rise
European LNG import capacity is expected to increase by 74% over the next few years based on the projects announced so far, Fitch Ratings says in a new report.
European LNG import capacity already totalled 169 billion cubic metres (bcm) in October 2022. We expect a further increase in LNG purchases to 155bcm in 2023 after a 45bcm yoy increase to 120bcm in 2022. In our view, Europe will be able to reach the necessary level of purchases.
The key limiting factor for the planned increase in European LNG imports will be the availability of natural gas on global markets. However, we believe Europe will be able to cover its increased LNG needs in 2023. Global liquefaction capacity will increase following the start-up of large projects in the US and Qatar from 2024, but a more meaningful increase is likely in 2025 and 2026.
European natural gas prices declined considerably in 2023 from the peaks of 2022. Warmer winter weather, ample LNG supplies and demand destruction resulted in above-average natural EU gas storage levels. Gas storage sites in the EU are at 65% capacity and it is highly likely that they will reach full capacity well before winter.
Source: Fitch Ratings