Review article
https://doi.org/10.46672/zsl.9.10.3
Analysis of European production, trade and demand of liquefied natural gas
Davor Perkov
orcid.org/0000-0001-5426-443X
; Libertas međunarodno sveučilište Zagreb, Hrvatska
Josipa Aračić
Abstract
This paper provides an overview of the production, trade and demand of liquefied natural gas (LNG – Liquefied Natural Gas) on the European market. The current dynamics of the global market, the latest developments in contractual arrangements and selected regulatory considerations are described. The importance of importing liquefied gas comes to light after the Russian invasion of Ukraine in February 2022 and the emergence of the energy crisis when prices on the European market reached record levels of 300 EUR/MWh. Europe had to redirect its LNG chains, mostly towards the USA. In the context of the need for a quick reaction, spot contracts proved to be an efficient way of trading. This has led to a disparity in prices on spot markets and European trade hubs. As early as in 2023, only 18 percent of the gas volume was imported from Russia. The future brings about uncertainty in the demand for natural gas due to the energy policies of the EU, which faces the challenges of market regulation transparency in order to encourage competitiveness. The increase in LNG imports implies new capacities and the construction of new liquefaction terminals. Almost 75 percent of new terminals and capacities built since the onset of the energy crisis
are floating terminals, i.e. FSRU units for storage and regasification. By the end of 2024, regasification capacities in the EU will reach 235 billion m³, which represents only about 55 percent of the annual demand. The LNG facility on the Croatian island of Krk has all the predispositions to become the energy hub of this part of Europe. The aim of the paper is to determine the connection between the increased trade in liquefied natural gas and the diversification of the long-term LNG supply of the European market.
Keywords
Hrčak ID:
327123
URI
Publication date:
31.12.2024.
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