How can Europe get off Russian Gas with LNG?

Due to the ongoing situation in Ukraine, many countries are looking to end their usage of Russian gas, however this poses many challenges. In this blog, Lanner’s LNG Director, Briain O’Dowd, looks at how LNG can be used to respond to this shift in supply requirements, and the ways Lanner can support the logistics in doing so.

Russian Gas makes up about 30- 45% of European Gas demand in both LNG and pipeline. The EU’s plan to curb Russian supplies by two-thirds by the end of the year will result in the rerouting of trade flows globally. The short-term result is volatility and a global spike in Gas prices as the northern hemisphere winter has left gas supplies low. The importation of Liquid Natural Gas (LNG) will play a key role in making up the short fall.

LNG Regas Terminal operators will now play a pivotal role in the supply chain. Their ability to respond to big shifts in demand means the EU regas infrastructure would be put under significant pressure to make up the difference, driving up demand for LNG cargos. This is not as straight forward as it seems, operators must balance many variables including cargos size, weather windows, berth availability, storage and inventory management, as well as planned and unplanned maintenance to make strategic decisions on how to maximize throughput.

In this environment, Shippers & Operators need to be able to rapidly stress test the implications of technical and financial options. Commercial instruments such as DES, FOB or Spot cargos need to be balanced against technical and logistical considerations. Broader strategic questions on CAPEX investments, time of expansion, as well as the 'where, when and what' to invest in will rise to the fore.

Clarity on decision making in the face of what may seem like overwhelmingly complex problems and choices can be difficult, this is where Lanner’s LNG logistics simulation provides the mechanism to evaluate problems and solutions and identifying what our clients couldn’t see on paper.

And that means finding out what works – and what doesn’t - from our terminal risk evaluations before sinking time and money into marketing and shipping opportunity assessments built on flawed thinking.

See our  LNG page for more details, or contact us today, to discuss your requirements.