ENTSOG TYNDP 2017 - Main Report

LNG as a multi-source LNG is traded in a global market which has been constantly growing during the last dec- ades. By giving access to a large variety of sources and routes, LNG makes gas reserves around the world accessible to the EU market. An LNG terminal is therefore a gateway to many different producers and sources of gas located in different parts of the world. LNG implies a diversification by itself, diversifying supply sources on both a long term and a short term basis, which is a strong insurance against supply disruptions of a given country and/or producer as long as the country is prepared to pay the price. Furthermore, LNG not only pro- vides diversification of supply but also adds to competition and effective market functioning. LNG volumes can enter the EU market and compete with and/or complement traditional pipeline gas supplies, thus putting additional pressure on gas suppliers. In 2015, the EU imported LNG from more than 9 different origins around the world. The num- ber of different origins supplying LNG to the EU has remained between 7 and 12 during the last decade. Nothing indicates that the number of origins is going to decrease in the future. On the contrary, with new trends emerging on the global LNG market (e. g. increasing LNG volumes on the supply side, decreasing EU domestic production, etc.) an increased num- ber of LNG liquefaction plants located in an in- creased number of countries will be entering the market and a higher number of LNG cargoes are expected to arrive in Europe in the upcoming years. This is contributing further to

increasing diversification, supply competition and security of supply for the benefit of the EU consumer. In case of a supply disruption within the EU, increased LNG deliveries in BE, ES, FR, GR, IT, LT, NL, PL, PT and UK will help to meet Europe’s needs and free up pipe-gas for other parts of the EU. LNG has already demonstrated it is an effective tool in addressing emergencies and mitigating supply shortfall/demand spikes. For instance, following the Fukushima tragedy, by accepting higher LNG prices, Japan was able to attract additional LNG supplies from all over the world and increased its LNG consumption for power generation from 50bcma to more than 70bcma in 2012. Other examples where LNG played a key role in mitigating supply emergencies are: Chile post curtailment of imports from Argenti- na (mid 2007), Brazil droughts impacting hydro-based power production (2014), Israel & Jordan post curtailment of imports from Egypt (2012). This demonstrates that LNG offers a fast track solution from the perspective of both the molecule as well as the infrastruc- ture.

Source: GLE

%

100

Algeria Libya Egypt Russia Peru

90

80

70

Malaysia Australia Yemen

60

50

Qatar Oman Abu Dhabi Trinidad & Tobago Norway

40

30

20

Nigeria Equ. Guinea USA

10

0

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Year

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

EU LNG Imports (bcm)

49

45

48

60

75

76

55

41

41

45

Number of origins

8

8

9

12

12

11

7

9

8

9

Figure 3.39: Contribution of each LNG origin to the total EU LNG imports

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