According to the latest report by the Institute for Energy Economics and Financial Analysis (IEEFA), the European Union’s (EU) LNG import terminals are seeing reduced usage as gas demand continues to fall across the continent. After a sharp drop in 2023, gas consumption in Europe fell by another 5.4% in the first half of 2024, resulting in a significant decrease in LNG imports.
Declining LNG Import Terminal Utilization
The declining demand for natural gas has led to underutilization of LNG import terminals in the EU. In the first half of 2024, the average terminal utilization rate dropped to 47.2%, down from 62.8% in the same period in 2023. Despite recent expansions, Europe’s LNG terminal infrastructure is likely to be increasingly underused as gas consumption continues to shrink.
Overcapacity and Future LNG Infrastructure
Since 2022, Europe has expanded its LNG import capacity by 23%, adding 58 billion cubic metres (bcm). Despite falling demand, many European countries are still planning to invest in new LNG terminals. IEEFA forecasts that by 2030, as much as 75% of Europe’s LNG import capacity could remain unused.
Rising Russian LNG Imports
Despite efforts to reduce reliance on Russian fossil fuels, Europe increased its imports of Russian LNG by 11% in the first half of 2024. France saw a significant rise of 110% in Russian LNG imports, while Spain’s imports remained flat. A ban on Russian LNG transshipments will take effect in 2025, but Europe’s decreasing demand for LNG is expected to limit the impact of the ban on supply security.
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Source: IEEFA
