That LNG will play an even greater and more important role in the supply of energy in Europe and across the globe as a result of the conflict in Ukraine is a given. Hitherto, Russia has supplied 30 - 40% of Europe’s natural gas over the past five years. Following Russia’s aggression, the EU has asserted that it aims to reduce natural gas imports from Russia to zero by 2030, if not sooner. As Timera Energy makes clear in their article entitled, ‘A seismic shift’, which starts on page 18 of this issue, “Given the absence of other supply flexibility into Europe, a pivot away from Russia is effectively a pivot towards LNG”.
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For LNG producers, this ‘pivot’ looks like good news and is a bullish signal to the LNG power houses of the US, Qatar, Australia, and others. Indeed, as Europe scrambles for new natural gas suppliers, the US is adapting to a new role as the world’s largest producer of LNG. Having produced 9.76 billion ft3/d in 2021, US LNG production is expected to reach 12.19 billion ft3/d in 2022 and 12.64 billion ft3/d in 2023. Quite some achievement from a standing start in 2016 when it first began exporting in earnest.
However, the International Group of Liquefied Gas Importers (GIIGNL) has crystallised their concerns about rising LNG prices in the light of the current global energy crisis in a public declaration issued 11 April 2022. GIIGNL states that “access to LNG is increasingly critical to energy security and emission reduction worldwide, including in emerging markets. In this context, further facilitation and strengthening of LNG trade is paramount”. It goes on to call for market interventions from governments and public institutions to make permitting and construction of key LNG infrastructure easier to facilitate across the developed and developing world. “Without supportive policy and regulatory frameworks creating an adequate environment for LNG investments, many countries will be facing energy security issues or will be forced to burn more coal and oil, compromising the mitigation of climate change and the attainment of net zero ambitions”.
The Russia - Ukraine conflict has triggered a profound shift in energy policy in Europe and inevitably this will play out across the world. As Russia starts to ratchet up the pressure by cutting off natural gas supplies to Poland and Bulgaria, as seen in the past few days, the reality comes into even sharper focus. The LNG sector stands at the very forefront of the solution. However, current global LNG capacity is finite. New projects take years to come onstream as does shipping capacity. Action is required by governments to clear the way for LNG expansion worldwide or inevitably there will be a return to burning coal and oil – if not in Europe then in developing nations unable to afford escalating natural gas prices.
Alongside LNG, hydrogen is emerging as an important element of the global energy transition strategy. As such, I am delighted to announce the launch of our new publication, Global Hydrogen Review. This sits alongside our existing portfolio of leading energy publications (from upstream to downstream and coal and renewables) and is dedicated to the coverage of hydrogen production and its applications worldwide.
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