EU countries rush to expand gas import capacity

"This is at odds with recent analysis showing that the EU has enough gas import capacity," Greig Aitken, GEM analyst, told EUobserver on Monday (16 May), adding that the expansion of LNG "clashes" with EU goals to reduce gas use.

The EU is set to announce its ambitious RePowerEU strategy on Wednesday, which aims to slash Russian gas imports by two-thirds before the year's end and fully decouple from Russian imports by 2027.

This involves accelerated investment in renewables and energy efficiency.

But the EU is also looking at the US, Canada, Egypt, Israel, Nigeria, Senegal and Angola to increase LNG supplies to Europe by 50 billion cubic metres (bcm) per year.

"The initial RePowerEU proposal in March helped catalyse the stampede of LNG proposals we see now," Aitken said, adding that the plan should focus on reducing demand "rather than locking-in fossil fuels with unnecessary LNG expansions."

Artelys, a Brussels-based data consultant, in a study this month, concluded that the EU only needs one extra LNG terminal in Finland and the Baltic region if it were to replace all Russian gas imports with LNG in the case of a cut-off.

"New LNG terminal proposals currently being put forward," the researchers conclude, "are found to be unnecessary from a security of supply point of view. If added, these assets would quickly end up as stranded assets."

But some EU lawmakers have signalled excess capacity may be a good thing.

"I hope we will have more capacity than we can use," Jakub Černohorský, energy attaché for the permanent representation of the Czech Republic to the EU, the upcoming EU president, said. "We need excess capacity to redirect our flow. This will make Europe stronger."

But according to Artelys, new LNG investments are most at risk of becoming stranded assets due to their relatively high costs.

New GEM figures published on Monday reveal an additional import capacity of 93 billion cubic metres has been proposed since the European Commission announced plans on 8 March to quit Russian gas— on top of the already existing capacity of 157 bcm per year.

The European Union imported 155bcm of natural gas from Russia in 2021.

Accelerating renewable energy and encouraging energy saving and energy efficiency is a more effective, cheaper and environmentally less destructive answer to the bloc's energy security needs, Ember, a think tank based in the UK, also concluded in a March study.