Europe can’t count on warm winters to solve its energy woes
VANCOUVER, July 10 – The European – and indeed global – natural gas supply crisis that followed on the heels of Russia’s invasion of Ukraine in February 2022 has highlighted not only the importance of natural gas for heat and energy in Europe but also its “centrality” to the broader European economy, Uniper CEO Mike Lewis said today at the LNG2023 Conference here.
“We got lucky, it was a very warm winter,” he said, before adding that Europe’s reliance on Russian pipeline gas was exposed in the days and weeks following the invasion.
“We had a single point of failure, and it failed,” he said. Key to addressing that failure was LNG, which “showed how quickly we could move away from pipeline gas” and revealed “enormous flexibility in the LNG supply chain,” he said.
To replace Russian piped gas, Germany fast-tracked new LNG import and regasification capacity, and the country now expects to add about 45bn m3 of regas capacity over the next four or five years.
Ongoing closures of coal generating facilities, he said, also reinforce the necessity of LNG imports as Europe seeks to reduce its carbon footprint. Uniper itself will continue to diversify its supply chain, he said, and while there is reasonable visibility over the next few years in terms of European gas demand, beyond that the situation is “very, very challenging.”
At the same session, Tellurian CEO Octavio Simoes said the short-term need for LNG in Europe remains acute, although it did escape major difficulties when this past winter was warmer than normal.
“The problem for Europe will not be over for four years. We can’t just keep praying for warm winters. That is not an energy policy.”