The European Union’s plan to ban LNG imports from Russia will prompt a surge in demand for LNG carriers to the tune of 30 new vessels, a senior Vortexa analyst said ahead of the LNG Qatar gathering that starts today.
According to Ashley Sherman, senior LNG analyst at the company, if the EU sanctions leave currently unsanctioned Yamal LNG free to deliver liquefied gas to European buyers, at least 30 new low ice-class or non-ice-class LNG carriers to satisfy demand for the fuel from the second-largest importing region after Asia.
In December last year, the European Union agreed a legally binding, gradual reduction in both LNG and pipeline gas imports from Russia, eventually resulting in a full ban on these exports, with the deadlines set for the end of 2026 for LNG and the autumn of 2027 for pipeline gas.
Last month, the European Council gave the final approval to the ban. It also gave EU members until March to “prepare national plans to diversify gas supplies and identify potential challenges in replacing Russian gas.” Hungary and Slovakia have protested the move on the grounds it would raise their energy costs to unacceptable levels.
The Yamal LNG facility, operated by Novatek, has been excluded from direct sanctions so far due to the Europea Union’s strong demand for gas, but the EU has sanctioned vessels loading from the Western Siberian LNG plant.
Novatek’s second LNG plant, however, Arctic LNG 2, along with Gazprom’s Portovaya LNG plant, are under Western sanctions. They still export liquefied gas to China, despite the sanctions on both production facilities and LNG carriers servicing them.
Meanwhile, the EU imported record volumes of LNG last month amid harsh winter weather, with the total calculated at 12.7 billion cu m, Russia’s TASS news agency reported, citing figures from Gas Infrastructure Europe.
By Irina Slav for Oilprice.com
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