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Europe set to absorb more LNG in 2018

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LNG Industry,

Europe may absorb more LNG in 2018 because of growing global liquefaction capacity. But Russia's response to increasing LNG supply remains unclear.

Suppliers of pipeline gas to Europe may have to maintain lower prices to keep out uncommitted LNG cargoes, either through contract renegotiations or selling supply at European hub prices.

UK NBP gas prices would have to be at a premium to the US' Henry Hub of US$1.45/mn Btu or less to discourage additional US LNG imports.

However, the UK premium could be as low as around US$1/mn Btu to attract US LNG to Europe.

Russian state-controlled Gazprom expects little competition from US LNG, at least this year. But it would be in the company's interest to compete with this growing supply source, given its declining domestic gas sales.

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