The scramble by countries across Europe to install new LNG import facilities in record time continues to pick up pace, with FSRUs now secured for deployment in a number of EU member states.
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The sharp fall in Russian pipeline imports -- and the prospect of flows from Russia being cut further or halted completely -- has led to plans to realize numerous projects, both old and new, as quickly as possible.
Most of the plans are for floating LNG import facilities -- known as FSRUs (floating storage and regasification units) -- which can be installed more quickly than onshore, permanent import terminals.
Some 25 new FSRUs are expected to be installed across the EU in the coming years, according to S&P Global Commodity Insights data, with the first facilities already expected to be operational before the end of 2022.
More details on the planned terminals are available in the Gas and Fuels chapter of the Atlas of Energy Transition, published by S&P Global.
Projects are moving forward at unprecedented speed, driven by the urgent need to displace Russian pipeline gas, with developers praising the combination of political and commercial will in accelerating work.
German grid operator Open Grid Europe this month began work four weeks ahead of schedule on a new pipeline to link the site of a planned FSRU at Wilhelmshaven to the German network.
"Only through close cooperation between politicians, authorities and companies were we able to reach this important milestone," OGE's Thomas Huwener said.
Germany is arguably the EU member state most impacted by the Russian gas curtailments and as a result is charging ahead with five new FSRUs as well as two permanent onshore LNG import sites.
There are also plans for five FSRUs in Greece -- which is aiming to become a gas hub for supplies to the wider southeast European region -- as well as two in the Netherlands, two in Italy (plus two more for the island of Sardinia), and two in Ireland.
Single FSRUs are also planned in a number of other EU countries including France, Finland, Estonia, Cyprus and Poland.
Platts Analytics LNG analyst Luke Cottell said that Russia's invasion of Ukraine had rapidly re-shaped commodity markets, with European gas and LNG at the epicenter.
Cottell said the majority of the burden of replacing Russian gas was falling on LNG, although regasification and interconnector capacity were creating bottlenecks and driving large intra-regional hub price dislocations.
"As we move into 2023, the deployment of new FSRUs should help to iron out large dislocations between hubs in Europe, as bottlenecks are eased," Cottell said.
But this, he said, would not necessarily mean that prices would fall, with much set to depend on Europe's ability to secure LNG cargoes.
"While capacity constraints limiting Europe's ability to offset Russian pipeline gas with LNG will be somewhat alleviated, focus will instead turn to the availability of spot LNG on the global market, and the price that must be paid to outcompete consumers in Asia," he said.
European gas prices remain at sustained highs after the Dutch TTF month-ahead price hit a record Eur212.15/MWh on March 8, according to Platts price assessments from S&P Global.
The contract was last assessed at Eur193.30/MWh on Aug. 9 as concerns linger over Russian gas supplies to Europe ahead of the upcoming winter.
Germany in particular has accelerated efforts to offset lower Russian imports, with LNG developments boosted in recent months by a number of new regulatory initiatives.
In May, the German parliament approved a new law designed to accelerate the approval process for new LNG import terminals and the German regulator in June said it planned to lower the feed-in tariffs at LNG terminals by 40%.
Germany has also now decided on the locations for all four of the FSRUs it has chartered, with two vessels to be deployed at Wilhelmshaven and Brunsbuttel at the turn of the year.
The other two FSRUs will be available from May 2023 and will be located at Stade and Lubmin.
As well as the four state-backed FSRU projects, a fifth project was announced on July 13 by privately owned Deutsche ReGas that will see France's TotalEnergies supply an FSRU for deployment at Lubmin as early as December.
In the Netherlands, operator Gasunie expects to deploy two FSRUs -- the Exmar S188 and Golar Igloo -- already in September.
"As early as by the end of this calendar year, the Netherlands' LNG import capacity will double and we will be the biggest contributor to the ramping up of Europe's LNG import capacity," Gasunie CEO Han Fennema said in July.
The European Commission also sees increased LNG imports as key to reducing dependence on Russian gas, saying in its new energy strategy published in March that it could source an additional 50 Bcm of LNG within a year.
The US pledged to provide an additional 15 Bcm of LNG to the EU in 2022, with the EC saying it would look to guarantee longer-term demand for US LNG of some 50 Bcm/year to 2030.
Europe currently has an import capacity of around 160 million mt/year (220 Bcm/year), but according to industry group Gas Infrastructure Europe (GIE) LNG terminals in the EU could provide a gateway for more than 285 Bcm of imports by 2030, enough to meet estimated import demand at that time.
However, the challenge remains how to secure LNG volumes, with GIE Deputy Secretary General Roxana Caliminte saying in April that the EU needed to consider long-term contracts to make sure LNG comes to Europe in sufficient quantities.
Caliminte pointed to Qatar as an example, where the majority of its LNG is sold to Asia under long-term contracts.
"So it is important to have an open-minded [European] Commission and allow member states to [use] such mechanisms too. There is no way around it," she said.