Europe fills their bunkers with competitive U.S. LNG

Prices of Natural Gas in Europe are in decade low, simultaneously with the important reduction of LNG prices in Asian markets. This fact will lead to a sharp increase on LNG cargo that reach the continent. Not only that, nations, find a good chance to fill their gas bunkers reserves for the winter. One first notice is that, Europe is well prepared to welcome a possibly rough winter, with low temperatures and increased demand. According to Euractiv and Gas Infrastructure Europe, bunkers are by 90% full. In addition, it is worth mentioning the fact that United States LNG imports increased 272% compared to last year as, not only north countries but south as well, absorb large amounts, with Spain leading the race. We also need to take into account that LNG exports of US are expected to increase in subsequent years as new production lines are anticipated at their east coast. Great role to this situation, played the joint statement of 25 July 2018 of President Junker and Donald Trump. Since the first cargo in 2016 US LNG exports in Europe reached 10.4 billion cubic meters. In terms of EU total imports, US  share is 13.4% which is a lot of times higher than 2.3% that was the amount before the Joint Statement. From US side, Europe absorbs more than 10% of their exports making it one of their greatest markets. As American LNG gains hectares in Europe, both Russian and Iranian reduced their share. Gazprom, recorded in 2018 decrease in its proportion of LNG market in EU, for the first time after a decade, while Iranian exports have almost zeroed due to US sanctions.                                                                  EU has a well-established LNG import capacity of about 150 billion cubic meters for back up use. In the meanwhile, in line with the strategic plan of diversification and security of supply, EU expands current capacities and allocates funding for developing new ones. Some of the most recent projects include the extension of LNG terminal in North-Western Poland close to the Baltic Sea coast. An agreement between Polish government and Polskie LNG signed on April 24 with co-funding by the European Regional Development Fund. The total funds EU contributed exceed €128 million and come to add up to the already €224 million already invested in the previous funding periods in extending the terminal. Another important project is the investment on the LNG terminal of the island of Krk in Croatia. European Union contributed with €124 million with €108 of them to be driven for the development of the terminal and €16 for the evacuation pipeline. Apart from those projects, EU supports the capacity development for LNG in Greece, Spain, Ireland, Sweden and Cyprus with the aim that all twenty three member states have access to three types of gas and to the international LNG market. On the one hand, diversification of the suppliers is on the run, while on the other hand, in EU, LNG consumption roadmap is highly uncertain. In the case EU will comply with United Nations suggestions, by 2050, needs to reduce LNG use for power production by more than 50%. Apart from that in a current policies scenario, LNG consumption is expected to have a boom in EU market.