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Europe braces for another energy dearth

Qatar was surprisingly quick to “decline” fulfilling the possible shortfall

Quoting data from CEDIGAZ (French gas intelligence firm), US Energy Information and Administration (EIA) said a large share of Europe’s supply of liquefied natural gas (LNG) originated in the United States (US), Qatar, and Russia in 2021. Combined, these 3 nations accounted for almost 70 per cent of Europe’s total LNG imports.

Possible back up candidates
The US became Europe’s largest source in 2021, accounting for 26 per cent of all LNG imported by European Union member countries and the United Kingdom (UK), followed by Qatar with 24 per cent, and Russia with 20. In January 2022, the US supplied more than half of all LNG imports into Europe.

With risks of Russia’s cutting supply to Europe, Qatar’s Energy Minister Saad al-Kaabi alerted that it is not able to fill the shortfall should that happens. He said, “Russia provides some 30-40 per cent of the supply to Europe. There is no single country that can replace that kind of volume.” Minister Kaabi noted that most of the LNG are tied to long-term contracts and clear destinations. Hence, to replace that sum of volume that quickly is almost impossible.

Qatar is one of the world’s top LNG producers, and has recently been approached by the US to reroute gas supplies to Europe in case Russia attacks Ukraine and US imposes sanctions on Moscow. It has most of its volumes locked under long-term contracts mostly to Asian buyers but also ships cargoes to Europe. Kaabi stressed that the amount of divertible contracts from Qatar that can be sent to Europe is only 10-15 per cent.

Europe’s LNG terminals also have limited capacity to absorb extra supply from the US or other major producers if (Russian) gas supply is disrupted. Russia’s recorded supplies to Europe differed, so were observers’ takes. Political analyst Cinzia Bianco told German media, Deutsche Welle (DW), “In view of the crisis, US could urge partners like Saudi Arabia and Qatar to expand energy supplies to Europe in case of Russian cuts. LNG is usually contracted on a long-term basis, in Qatar’s case by India or South Korea. Qatar might still be interested in backing the US since it would have some leverage, and is one of the best options available.”

However, Sami Hamdi, Managing Director of International Interest, a global risk and intelligence firm in London picked up a different vibe. He told DW, “Qatar is giving false promises of ‘Yes, I can supply the gas,’ but is in fact hoping that there is no war.”

Marine Online Media Team
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