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Europe LNG imports may reach record 175bcm in 2024 – Icis

(Montel) Europe's LNG imports looked set to rise 15% this year to a historic high of 128m tonnes (174.5bcm), consultancy Icis said on Friday.

Most of the LNG demand growth will be driven by Western Europe, including the UK, and should come in the latter half of the year, Icis said in its 2024 LNG outlook.

However, the consultancy said the region's total gas demand will unlikely recover to levels seen before Russia's invasion of Ukraine in February 2022, which subsequently spiked gas prices to record highs and prompted the EU and UK to seek alternatives to gas from Russia, once Europe's biggest supplier.

European nations have increased LNG imports from the US and Qatar, but some continue to take deliveries from Russia. Unlike oil, LNG and gas are not fuels included in EU sanctions on Moscow.

Furthermore, Icis said that European fuel costs "remain too high relative to other regions" for demand to return to pre-2022 levels, even though benchmark gas prices have fallen back below EUR 30/MWh – well below the peaks above EUR 300/MWh seen in 2022.

Tight LNG market
Icis said LNG supply this year would remain relatively tight to demand, providing support to European TTF gas prices. "Market signals will be required to create the needed balance," it added.

Global LNG demand in 2024 will reach 423.4m tonnes, a 5% rise from last year, but capacity growth will remain limited.

“This level of imports will not be met [by supply], highlighting the ongoing tightness in the market,” Icis said.

“With ongoing declines in Japan and Korea, but modest LNG import growth in China continuing, we see the unconstrained global market as undersupplied on an annual basis.”

Icis reckoned the market would tighten further if China’s economy grows more than expected or if Russia’s Arctic LNG 2 project is unable to operate due to sanctions.

“However, there is a major new wave of projects ahead from 2025 onwards, first from the US, Canada and Mexico and later from Qatar, so a new wave of LNG supply is not too far away,” Icis said. “There could be some upside on [supply] growth in late 2024.”