Europe will continue to increase LNG imports in the next 2 years

It is reported that Poten, a shipping brokerage company, recently publicly said that Europe, which is in short supply of energy, will import more liquefied natural gas (LNG) in 2023 to ensure that it has sufficient natural gas reserves and replace Russia's pipeline natural gas. Jason Feer, head of global business intelligence of the company, said that Russia's pipeline natural gas was almost abandoned in Europe. Jason Feer said that in view of the higher temperature in winter than expected, Europe's natural gas reserves in 2023 are sufficient, and the new floating storage and regasification unit (FSRU) has promoted LNG import to a certain extent. However, it is also pointed out that due to the dismantling of all Russian natural gas pipelines, Europe still needs to import more LNG than in 2022. It is estimated that the LNG import volume in 2023 will reach 192 billion cubic meters, 80% higher than that in 2021. It is reported that Europe prefers to sign medium and long-term LNG procurement contracts rather than long-term contracts. Most of the new LNG depends on FSRU, which has signed a 10-year lease contract with Europe. The LNG imported from Europe mainly comes from the United States. Freeport LNG will bring 1.3 million tons/month of production to the market after it resumes production in 2023. It is reported that Poten revised its previous forecast and predicted that the LNG demand in Europe will gradually increase in 2023 and 2024, and will gradually decrease in the next eight to nine years as countries cut down on the expenditure of natural gas and the use of renewable energy. In terms of current development, one of the solutions in Europe is to purchase and sell LNG through aggregators. This model has almost blocked the possibility of Russian natural gas returning to the European market, but it still needs to strictly calculate the total amount of LNG procurement. In case of any error, it may face other risks. In addition, Jason Feer also introduced several other projects that are likely to receive European investment. There are Arthur Port and Cameron Train 4 project in Sembra, Rio Grande project in Next Deleten, Plaquemines 2 project and CP2 project in Venture Global, and development project in Mexico Pacific. These projects will benefit Europe. The boss of a Finnish LNG liquefaction company said that they planned to import more natural gas processing equipment, including three-phase separator, natural gas desulfurization and cold box. Although the LNG price has dropped from the peak, it is still at a high level, which may affect the demand of price-sensitive markets such as South Asia and Latin America, or will urge buyers in these regions to seek other solutions. At the same time, considering that other liquefaction projects are facing problems such as rising costs and lack of financing, Poten expects that the LNG price market will continue to fluctuate this year.