Europe will need huge volumes of LNG next year as Russian pipeline gas supplies decline, commodities company Trafigura said, adding that it expects volatility in natural gas and LNG markets to continue, Oilprice.com writes.
While Europe will be able to avoid a blackout this winter by drawing on inventories and reducing demand, it will have to import huge volumes of LNG in 2023 given the sharp decline in flows from Russia, Trafigura said in the review.
Natural gas prices in Europe must remain high for the continent to continue to attract most LNG cargoes, competing with other key demand centers. The commodities trader expects Europe to continue to prioritize supply security next winter and beyond.
The United States has shipped record volumes of LNG to Europe this year. Reuters estimates that 72 percent of all U.S. LNG cargoes were shipped to Europe in November.
However, a significant drop in Russian gas shipments this year did not occur until June, meaning that Europe could still stockpile some Russian gas earlier this year.
Ahead of the winter of 2023/2024, Europe's gas supply gap will be much larger without Russian gas. Europe will not import much Russian gas - or not at all - if Russia stops supplying via the only remaining active link via Ukraine and via Turkish Stream.