Spain & Portugal have a smaller one that is for internal use, they import from North Africa for the rest. There is a large (in area) field in France but it is fairly shallow and even with extraction there France was importing gas. Norway is capped on production, the North Sea in total is a large field but it consists of a lot of small bubbles, making it relatively expensive and time consuming to extract so GB & Netherlands won’t get more out of that in a time frame that matters. Most of them were being planned/built when the fracking boom started to export the excess production (the export of natural gas has quadrupled in the period 2015/2016-2020/2021) without people in the US noticing it.ĭo note that as the fleet of LNG tankers (the EU ordered 10 billion worth of regasification plant ships and there is also an increase in orders for LNG transports to match) expands the price of US natural gas will rise to get closer to the point where US natural gas price plus export costs gets to around the world average.Ĥ2% of gas is produced by EU countries, rest is import.Ģ9% import is Norway, 11% is Great Britain, 11% is North Africa (but due to lack of pipeline capacity from Spain & Italy that is supply for the south EU), Russia down to 9% (replaced by among others more Norwegian gas & LNG), 4% the different middle Asia -stans, 36% LNG. The facilities needed for this don’t appear overnight. Just the EU was/is willing to pay an average of four times what the gas price on average is in the US, even if you factor in the costs of transporting the gas it would be fiduciary malpractice to not sell outside of the US if export is possible at all.Ģ) It is not just the exports that cause the rise in prices The price differential between the US and the rest of the world is so great that it would be stupid by the gas producers to not export. Would you like to be notified via email when WOLF STREET publishes a new article? Sign up here. Click on the beer and iced-tea mug to find out how: The price of the Japan Korea Marker (JKM) futures contract, at $26.80 per million Btu has plunged 62% from the crazy peak on Aug(data via ):Įnjoy reading WOLF STREET and want to support it? You can donate. In terms of LNG pricing, the pressure has come off too. Storage levels differed by countries, but all of them were in great shape, particularly in Germany, which has managed to actually increase its storage levels over the past few weeks during a period (winter) that would normally be the withdrawal period. This is how the 916 terawatt-hours (TWh) of natural gas in storage on January 14, compares to the levels at the same time of the year in prior years: In the European Union overall, storage facilities were 81.7% full on January 14, according to GIE (Gas Infrastructure Europe). Natural gas storage facilities in Europe are in exceptionally good shape for this time of the year. A shift in power production from natural gas to other energy sources, including coal, also motivated by big price increases of natural gas through the summer of 2022.Īll of this worked together to reduce demand for natural gas and increase supply to replace pipeline natural gas from Russia.A large-scale effort by households and businesses particularly in Germany to reduce natural gas consumption (heating, hot water), motivated also by the big price increases of natural gas.Norwegian gas deliveries to Germany reached historic highs. Pipeline natural gas from Norway to the rest of Europe grew by 4% year-over-year in 2022 113 billion cubic meters (Bcm), according to S&P Global.Rapid deployment of floating storage and regasification units (FSRU) in Europe to offload this LNG supply, including in Germany.Surging supply of LNG from the US and other locations around the world.In 2022 and into 2023, several factors came together to avert what had been seen as a potentially dreadful energy crisis:
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