As winter approaches, a global battle for LNG has begun

Since the beginning of the conflict in Ukraine, on February 24, they have become more visible near the European coasts. On their way to Asia, these LNG carriers, factory ships, with large refrigerated tanks, used to transport gas over long distances, are now often “rerouted” from Asia to an Old Continent thirsty for gas, after Moscow ceased deliveries. Since the start of the war, the European Union (EU) has increased its imports of liquefied natural gas (LNG) by around 60%, particularly from the United States.

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This great upheaval in gas flows illustrates a fact: a global battle for LNG has begun. “After the tragedy [nucléaire] from Fukushima [en 2011]LNG had already made it possible to cushion the shock”, says Thierry Bros, professor at Sciences Po, energy expert. “ Europe then sent this liquefied gas to Japan and used Russian gas instead,” he recalls. Today, a twist in history: “If Europe has been able to replenish its gas stocks so quickly, it is thanks to the LNG that it has diverted from Asia, and this, by paying a high price for it, even if it means causing “blackouts” in other countries, such as India and Pakistan. »

Is this scenario tenable in the longer term? As winter approaches, Asian countries will also need to replenish their stocks, which should not fail to exacerbate international competition. South Korea, where legislation requires stocks to be 90% full by the end of October, will have to import more. For its part, Japan, very far-sighted, has already filled them above the average of the last five years. But what about China?

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“It’s the great unknown, emphasizes Vincent Demoury, General Delegate of the International Group of LNG Importers, everything will depend on the weather, whether the winter is mild or not, and the impact of the Covid-19 pandemic on industrial activity. » But also the revival of its coal-fired power plants. “It is not excluded, if the prices favor it, that Beijing decides to continue to operate its coal-fired power stations while supplying gas from Central Asia and Russia, as it has done in the latter month “, continues this specialist.

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Because, if the United States exports more of its gas, mainly from shale, the real winner in this crisis remains unquestionably China, which resells to Europe part of its LNG cargoes, purchased on long-term contracts , at stratospheric prices. Comfortable, this source of supply which makes it possible to overcome Russian constraints – and pipes – is already giving wings to Europeans. Evidenced by the infrastructure projects that the EU is in the process of acquiring. And this, despite the risk of getting bogged down in a costly climate strategy.

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