Europe may need to keep offering attractive prices to secure an additional 30 billion cubic metres (bcm) of liquefied natural gas (LNG) needed to replenish its storage levels, a senior Equinor executive told Reuters.

Equinor has previously estimated Europe would need around 250-300 more LNG cargoes this year compared to last year to fill storage tanks left two-thirds empty after the winter, which in turn would keep the gas market tight.

Securing such volumes was possible if Europe offered competitive prices compared with China and other Asian buyers, said Peder Bjorland, vice president of natural gas market at the Norwegian energy group.

“I think price is the most important tool in this game,” he said in an interview on the sidelines of Flame conference in Amsterdam.

“China is coming back, and it can be competitive,” Bjorland said.

China, the world’s largest LNG buyer, in April recorded its lowest LNG demand since October 2022, and had been reselling U.S.-sourced LNG cargoes to Europe amid tariff war with the United States.

A temporary truce agreed by Washington and Beijing earlier this week offered some relief, promising to unblock some of the two-way trade brought to a standstill by the conflict between the world’s two biggest economies.

Bjorland said Chinese LNG demand was picking up.

“That doesn’t necessarily mean that we will see a lot of new LNG purchases, but we will probably see a reduction of resale of Chinese cargo to Europe,” he said.

Weather conditions will also be crucial, with Asian demand linked to air conditioning needs over the summer and Europe’s needs tied to the winter heating season.

A cold winter could put Europe in a “more vulnerable” position if it starts the season with storage less than 85% full, Bjorland said.

The European Parliament approved earlier this month a loosening of gas storage filling requirements over concerns the existing target could lead to inflated prices.

Speaking of Equinor’s growth plans for LNG, Bjorland said Asia offered the biggest potential.

“For Equinor, the growth area will be LNG, and I think the growing region will be Asia, especially India, China and Southeast Asia,” he said.
Source: Reuters