The US Gulf has now exported its first LNG cargoes since the shale gas boom, but while Europe has been touted as a key destination for such supply in the future, LNG send-out from European terminals has failed to increase its share of the supply mix so far in 2016.
Use the arrows to see how supply to Europe in the first five months of 2016 compares with last year. Roll over the lines and points for import volumes and the percentage share of supply of each source.
Just short of 70 million tonnes per annum in nameplate US LNG production has been commissioned or is on track for commissioning by 2019 from five projects. The rise in exports will be steady this year and then accelerate in 2018 and could contribute towards oversupply in the Atlantic basin.
Only one LNG cargo has so far been shipped to Europe from the US Gulf so far however, and total send-out from European LNG terminals has actually edged lower compared to 2015, to around 18 billion cubic metres (bcm).
Instead, the volume shipped by Europe’s pipeline suppliers – Russia and Norway – has risen and both exporters have increased their share of the European supply mix.
In the case of Russia, historic low oil prices from the end of 2015 and early this year have fed through to lagged, oil-linked supply contracts, reducing the cost to European importers and incentivising greater offtake nominations.
Despite a 14.2bcm increase in pipeline imports, total European supply (from Russia, Norway, LNG send-out and storage withdrawals) has increased by only 7bcm, or 4%, year on year in the first five months of 2016.
This is because storage withdrawals have fallen sharply in 2016, leaving European stocks more than 10bcm closer to full capacity than this time last year.
February 2016 was a key moment for this trend, as European withdrawals sank nearly 7bcm year on year at the same time as Russian exports rose by nearly 5bcm.
A note on sources: ICIS has compiled Norwegian export data published by operator Gassco and Russian exports to Germany, Poland, Slovakia, Hungary, Bulgaria and flows to Turkey via Bulgaria, as published by the importing nations’ grid operators. Storage data is collated from European operators but does not include strategic stocks in Hungary, Italy, Poland, Portugal and Spain. LNG data refers to regasified LNG send-out from European terminals and not to the volume of imported cargoes.
Source: ICIS