Helen Jackson

Analytic and Research Support

Energy security: Potential for Liquified Natural Gas (LNG) to add to EU supply, 2015

Overview: Liquified Natural Gas (LNG) is widely regarded as a means of improving European energy security by providing alternatives to Russian pipeline gas. The diagram shows a heavily simplified European natural gas network showing where in the EU LNG is imported. It also shows the resulting additional volumes – all else being equal and compared to a world with no LNG – that could reach mainland Western and Central Europe. Figures describe the capacity of regasification (import) and cross-border interconnection infrastructure, as well as regional consumption, either on a peak winter day or on an annual basis.

Choose the time period to display:

This diagram uses the D3 data visualisation library.

Interpretation: The numbers in grey on the arrows near the centre show the maximum volume which could be added via each route, all else remaining equal – that is, with consumption and pipeline imports in/to the transit region staying the same. With current infrastructure, running at absolutely full capacity, LNG could supply a maximum of 55% of the annual consumption of Western and Central Europe (120 bcm), and 35% of the requirement of a peak winter day (328 mcm). The former would require extensive use of storage due to seasonal peaks and troughs in demand. In reality, Europe's LNG import terminals run at nowhere near full capacity, so these figures should be taken as an absolute notional maximum rather than what would actually happen.

About two-thirds of current EU regasification capacity is geographically remote from the main European network – located in Portugal, Spain, Greece, Lithuania or the UK. This situation is mitigated by high-capacity interconnections with Italy and the UK. Lithuanian gas infrastructure is not directly connected to the rest of the EU at all, therefore it cannot be viewed as adding additional secure supply to the network; in the event of pipeline supply disruption in the Commonwealth of Independent States, supply from Lithuania would face the same problem.

Outlook: European gas infrastructure is evolving rapidly. New LNG terminals are planned in Ireland, Malta, Croatia, Greece, Sweden and Estonia, with a Polish terminal coming on-stream in 2016. New interconnection capacity is also planned between Spain and France, as well as in the Balkans; and new pipelines such as the Trans-Adriatic. The outlook in the short-to-medium term is that LNG will have the potential to add an increasing proportion of Europe's gas requirement at lower prices. Actual volumes traded will depend on prices compared to pipeline supply.

About the data: Consumption figures from Eurostat. Infrastructure topology and data from the European Network of Transmission System Operators for Gas (ENTSOG). Peak winter consumption figures are estimated by taking the daily average for January over the years 2013-15. Annual data cross-checked with information in the IEA's Natural Gas Information. "Western and Central Europe" comprises of: Austria, Belgium, Czech Republic, France, Germany, Hungary, Luxembourg, the Netherlands, Poland, Slovakia, Slovenia and Switzerland.