Europe's LNG Demand Durable in Short Term

European LNG demand is expected to remain strong for the next few years as the EU continues to wean itself off Russian energy. This should keep Europe the world’s premium LNG market and transform top buyers in Asia like China into more flexible buyers of the fuel. However, Europe's newfound structural demand for LNG comes with much uncertainty, as the need to kick Russian energy is also driving it to accelerate development of renewables. This could prompt lower gas consumption in the continent sooner than had been expected before the outbreak of the Ukraine war a year ago. Europe imported a record 111 million tons of LNG in 2022, a 65% increase year on year. Energy Intelligence’s Research & Advisory unit says Europe will be the world’s second-largest LNG demand center behind East/Southeast Asia until 2027. The EU plans to phase out Russian fuel imports entirely by 2027, and it appears that it could stop importing Russian piped gas earlier than expected. Claudio Descalzi, the head of Eni, one of Europe’s largest buyers of Russian gas, recently said the company will completely replace Russian gas imports by 2025 via increased imports from North and West Africa, with 80% to be replaced by the winter of 2023-24. Of the over 20 billion cubic meters of extra non-Russian gas Eni hopes to receive, some 11 Bcm is expected to be LNG.