EU is betting on liquefied natural gas

EU is breaking a monthly record for LNG imports in an attempt to break away from energy dependence RussiaEuro News reported.

A recent EU agreement with the US will supply an additional 15 billion cubic meters (bcm) of LNG by the end of the year, with the goal of increasing annual supply to 50 bcm by 2030.

LNG is gas that has been cooled down to -162ºC to reach a liquid state. As a result, LNG is easier to transport to import-dependent regions, like the EU. Currently, the EU imports about 90% of its gas needs.

LNG is transported and then unloaded at ports with specialized depots to return the liquid to its original gaseous state and then transported through pipelines to power plants, businesses and households.

Crucially, LNG is produced by suppliers around the world, including the US, Qatar, Egypt, Israel, Nigeria and Australia. Therefore, the EU has many options to diversify supply chains, avoiding dependence on a single source.

However, demand for LNG is very high, with operators all at full capacity and rich nations competing for the commodity. LNG prices have risen steadily in recent months and are expected to remain high as long as hostilities continue.

In an effort to prevent competition, the European Commission has proposed a joint purchase of gas, based on lessons learned from the purchase of a COVID-19 vaccine.

Another major disadvantage is that the existing LNG infrastructure is heavily concentrated in the coastal states of Western Europe. This leaves the landlocked countries in Central and Eastern Europe mostly disconnected from the network, leading to a tendency to continue to depend on Russian pipelines.

Even more worryingly, LNG is a polluting fossil fuel that contributes to climate change. The EU’s push to increase imports of LNG has led to a reaction from environmental organizations.