- Spain has one of the largest LNG storage facilities in europe.
- Currently Spain is going through a warm weather and slowdown of economic growth which led to excessive supply of the product.
- An economics professor also said that Europe lacks LNG infrastructure in storage.
There have been large queues forming off the coast of Spain this week, dozens of Liquid Natural Gas (LNG) tankers have been waiting just off the Spanish coast to unload their cargo. But a bottleneck has developed due to a lack of storage capacity, as reported by CGTN.
Low economic growth
Spain has the largest LNG storage facilities in Europe, accounting for 44 percent of the continent’s capacity. But an exceptionally warm summer here and a slowdown in economic growth across the continent, especially in the industrial sector, has caused a glut in the product.
Measures applied
Gayle Allard, an economics professor at Madrid’s IE Business School, told CGTN Europe that the lack of LNG infrastructure in storage and ‘regasification facilities’ had exposed the need for more investment across the sector.
“I think the most effective short-term measure they have been working on is putting together floating LNG terminals,” she said.
“Because Spain has fixed terminals in several ports, it’s fairly well-equipped – but Germany has none, so they were looking at putting in more floating LNG terminals by the end of the year.”
Ending Russian reliance
LNG is seen as a good alternative to gas, which was largely supplied by Russia to Europe. The key advantage over traditional pipelines is flexibility: Delivery can come from various countries, which helps with energy security.
EU leaders have sought to improve their gas delivery infrastructure between countries with the MidCat Pipeline project. This would create a third gas corridor between France and Spain.
Analysts have stated that those waiting tankers could either look for other ports outside Europe – or even wait it out until gas prices increase next month, so they can offset their costs.
The EU has already reached its intended 90 percent gas storage earlier than expected. Officials will be hoping that it will ensure sufficient supplies throughout the winter months.
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Source: CGTN
