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Pipeline gas still more crucial than LNG for Europe

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World Pipelines,

Although LNG (liquid natural gas) provides a solid supplement to European gas supplies, the EU is and will remain a pipeline market – for good reasons. This is one of the theses of Wintershall's new position paper. LNG is natural gas that is liquefied and then transported by tanker. The liquefaction is highly energy-intensive – the energy consumption corresponds to about 13% of the gas transported. With an energy loss of less than 5%, pipelines are much more energy-efficient. Another argument for pipeline gas lay in its lower costs. Russian pipeline gas, for example, is more competitive and less expensive than LNG from the US.

Since the EU's own gas production is declining, Wintershall welcomes any additional import route. However, LNG terminals shall make economic sense. They should not be politically enforced or ‘inflated’ by subsidies – at the taxpayers' expense. The EU is fortunate to have two of the leading gas producers within pipeline distance: Russia and Norway alone supply over 60% of the EU's natural gas. LNG, on the other hand, contributes only about 16%. Existing LNG terminals in the EU have been operating at less than 30% capacity in recent years.

Moreover, Europe has so far only been a residual market for LNG. This was demonstrated, for example, by the cold snap in February 2018: Even then, LNG continued to go to Asia because higher prices were paid there. It was Russian pipelines that secured supplies in Europe.

Nevertheless, LNG is not only an option for the heating market, but also for the transport sector – an exciting option for Europe. Particularly for maritime shipping and heavy goods traffic, since it could replace heavy oil and diesel. LNG thus can help to protect the climate.

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Europe pipeline news