Gas prices forecast to triple, Europe faces ‘coldest winter’

RT Citing a report by energy consulting firm Rystad Energy (Norway) that said a “perfect storm” could be forming in Europe as the European Union (EU) seeks to limit its dependence on gas. Russia.

Rystad Energy experts analyze that the current supply of liquefied natural gas (LNG) is not enough to replace gas from Russia as winter in Europe approaches. This could push gas prices in Europe up to $3,500/1,000 m3.

According to the report, last year, Russia supplied 155 billion cubic meters to Europe, accounting for more than 31% of the “old continent’s” gas supply.

“Changing a substantial portion of the current gas supply to Europe would be extremely difficult, with far-reaching effects on Europe’s population, economy and the role gas plays in the process. regional energy transition”experts Rystad Energy said.

Rystad Energy also believes that the “boycott” of gas from Russia and Europe has created instability for the entire global LNG market, which has not fully recovered from a tumultuous year (2021). The decision to reduce dependence on Russian gas from Europe’s current level of 30-40% will change the global LNG market.

The report highlights that global LNG demand is expected to reach 436 million tonnes by 2022, far exceeding the current supply of just 410 million tonnes. Supply imbalances and rising prices will create great opportunities for LNG projects in the next 10 years, although even if they start now, they can only provide the first gas batch after this year. 2024.

According to the study, if Russian gas were to be banned tomorrow, the amount of gas currently in storage (about 35%) could “run out before the end of the year, leaving Europe with a brutal winter”. “. Under such a scenario, in the event that Europe finds an alternative supply, it will soon face industrial production cuts and a lack of fuel for power plants, which will have serious consequences. important.

Natural gas prices rose this week after Moscow imposed its first retaliatory sanctions on several European energy companies. According to data provided by London’s ICE, gas prices in Europe exceeded $1,200 per 1,000 cubic meters in the session on May 12. According to Reuters, wholesale gas prices in Europe have increased by nearly 300 percent from a year ago.