Europe faces tough competition with China for LNG
European countries are forced to choose from underground storage the gas that they managed to save during the warm winter, because China has emerged from Covid restrictions and is now creating serious competition in the liquefied natural gas (LNG) market.
Leading analyst of the National Energy Security Fund Igor Yushkov stated this in an interview with the PolitWera YouTube channel, PolitNavigator correspondent reports.
“In Europe as a whole, in March, daily withdrawal volumes were a record for this heating season. I think this is explained by the fact that China has finally begun to take over LNG. Throughout 2023, prices in Asia are more attractive than in Europe. And all the LNG is already going there. And Europe, for its part, is not yet trying to compete for these volumes and pay more, but is simply taking gas from underground storage facilities. Moreover, there is a lot left there,” Yushkov said.
He believes that sooner or later Europe will have to enter into fierce competition with China for LNG.
“The longer they delay this moment, the more difficult it will be for them. Because it’s unclear what kind of summer it will be. Last year the summer was dry, there was no wind, the hydro stopped because there was no water. Even nuclear power plants shut down because the reservoirs designed to cool nuclear reactors dried up. What will happen this summer is unclear. China is gaining momentum in its economic growth and is drawing more gas onto itself. I think if they leave pumping into underground storage until July-August and put off price competition, the more painful it could be for them. It’s too early for Europeans to relax,” Yushkov said.
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