Europe’s gas storage levels are worryingly low, with reserves at just 34%, and Germany’s dropping to 29%, reports Irina Slav of OilPrice.com. However, LNG imports are set to rise, and China’s reduced LNG imports—due to milder weather, strong inventories, and slower industrial activity—could benefit Europe by easing supply pressures and keeping prices stable. China’s imports are expected to be 22% lower than last year, making more LNG available to Europe. Despite efforts to reduce reliance on natural gas, Europe is increasing its LNG ties with suppliers from Africa and Qatar, while also continuing to depend on U.S. LNG. However, challenges remain, and Europe may need to explore long-term contracts and investments in LNG projects, similar to the Japanese model, to secure reliable energy in the future. Slav writes:
Europe’s gas storage levels this week reached an uncomfortably low level of some 34% full. Germany’s alone has dropped to 29%. Yet LNG imports are about to pick up and, for a change, prices might not surge—thanks to China.
Earlier this month, Kpler data showed that China’s imports of liquefied natural gas had slumped to the lowest level in five years. At 4.5 million tons in total, these imports reflected a milder February, ample gas inventories that China has been building conscientiously ever since its 2017 gas crunch, and slower industrial activity. Also, they reflected the Chinese response to Donald Trump’s tariffs, which took the form of retaliatory tariffs specifically targeting U.S. energy imports, with LNG subjected to a 15% import tariff.
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