LNG comes to Europe’s energy rescue — but for how long?
ISLE OF GRAIN, England — The placid waters near the entrance to the River Medway look more suited for sailboats, but some of the biggest ships in the world twist their way to a pier here.
Simon Culkin, the importation terminal manager at the facility called Grain LNG, jokes about making sure that none of these vessels are helmed by a “learner driver.”
The behemoths, some of them more than 1,000 feet long, bring cargoes of liquefied natural gas.
Once the ships lock onto a rack of pipes on the jetty, their frigid fuel flows into massive concrete-clad storage tanks 160 feet tall.
When full, these hulking cylinders pack an almost unimaginable punch of energy — enough, Culkin estimates, to power southern England for 10 days. Upriver is London, an economic powerhouse and huge energy consumer.
In recent months, energy markets in Europe have experienced the greatest disruption in memory, as well as record prices, as tensions built with Russia over Ukraine. But LNG, largely from the United States, has cushioned the blow in Britain and been a lifeline for Europe.
Yet even as the imports have advanced the European Union’s goal of slashing its dependence on Russian energy, the growing reliance on the fuel also comes with potentially negative implications, including uncertainty for its future and concerns about its effect on climate.
“Countries will need to source some gas if they are not getting supplies from Russia,” said Doug Parr, chief scientist and policy director at Greenpeace UK. “The climate risk is that there is a lock into new gas infrastructure which proves quite hard to retire.”
European imports of LNG rose by more than 50 percent compared with the period a year earlier in the first five months of 2022, according to Bernstein, a Wall Street research firm. Britain saw a surge of LNG imports in the winter months, with January the highest on record.
The increases in LNG have helped Europe compensate for shortfalls in gas from Russia. Increased imports are the most important facet of the European Union’s strategy for reducing dependence on Russian gas.
While Russia has long supplied a wide range of energy commodities to Europe, Moscow’s chokehold on supplies of gas, used for heating, cooking, generating electric power and industry, has grown particularly strong, supplying about a third of Europe’s consumption in recent years.
“We simply cannot rely on a supplier who explicitly threatens us,” Ursula von der Leyen, president of the European Commission, said earlier this year as she outlined a proposal to make Europe independent of Russian energy.
Unlike most natural gas, which comes through pipelines, LNG can be shipped from anywhere that has invested in the facilities needed to chill it to a liquid, a multibilliondollar investment, so it can go to places like the Isle of Grain with its mazes of equipment to turn it back into a vapor.
“The key is the flexibility,” said Paul Sullivan, head of systems capability and risk at National Grid, the utility that owns the LNG terminal.
But even as Europe embraces LNG with disclaimers from leaders like von der Leyen about eventually weaning itself off gas, climate activists worry that it could be investing many billions of euros in an expensive new program based on fossil fuels — one that, as Parr said, is then difficult to retire.
That is already happening. European countries are scrambling to build facilities to receive LNG.
Berlin now plans to build as many as four receiving units. Finland, Estonia, Italy and the Netherlands are all considering building terminals or expanding existing ones. Some of these units are likely to be floating installations that can be towed elsewhere when their leases end.
The liquefied gas is coming at a steep price.
“European prices have to rise to attract cargoes from Asia into Europe to fill the hole that has been created by Russia,” said Neil Beveridge, an analyst at Bernstein. “That requires some really high prices to do that.”