Released February 26, 2024 | GALWAY, IRELAND
en
Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Europe's dependence on Russian gas supplies dropped sharply by almost half in 2023 compared to 2022.
The European Union (EU) relied on Russia for just 15% of its supplies in 2023, compared to 45% in 2021. It imported 43 billion cubic meters (Bcm) via Russia last year, compared to 80 Bcm in 2022 and 155 Bcm in 2021. A combination of more reliable pipeline and liquefied natural gas (LNG) imports were crucial to overcoming the EU's heavy dependency on Russian gas imports. As a result, Norway and the U.S. became the region's main gas suppliers in 2023, representing 30% and 19% of total gas imports, respectively.
"The energy crisis taught the European energy market a hard lesson," the European Commission stated. "The large share of Russian oil and gas imports in Europe's energy mix had created an over-reliance on a single, untrustworthy supplier. Ensuring greater diversity in the sources of our energy imports, means that if one source suddenly gets cut off, for whatever reason, the effects are felt less acutely. Trading with more predictable and stable energy partners greatly minimizes the risk of malicious disruptions to the energy supply."
Before Russia's illegal invasion of its neighbor Ukraine, Europe's total gas demand stood at around 400 Bcm per year, with only about 10% of it covered by domestic production. Russia's throttling of gas supplies in 2021 forced the EU to rethink its energy security and plans. The European Commission's REPowerEU plan was launched in May 2022 in direct response to Russia's energy blackmail, aiming to bolster Europe's energy security by saving energy, speeding up the clean energy transition, and diversifying the sources of its energy imports. In addition to reduced gas imports, the EU banned all coal imports from Russia and has cut oil imports by more than 90%. For additional information, see May 19, 2022, article - Europe Proposes $220 Billion Boost To End Reliance on Russian Energy.
LNG imports and the building of more terminals played an increasingly important role in Europe in the past couple of years, especially in Germany, which had hardly any infrastructure in place a few years ago. The country relied on Russia for 55% of its gas imports in 2021, but that has now been replaced by other sources and a massive drive to create an LNG network. Last year, the EU imported more than 120 Bcm of LNG. In 2023, the U.S. was the largest LNG supplier to the EU, representing almost 50% of total LNG imports. Compared to 2021, imports from the U.S. almost tripled in 2023. The leading LNG importers in the region are France, Spain, Netherlands, Belgium and Italy. Industrial Info is tracking 141 LNG-related projects in Europe worth more than US$12.5 billion. Subscribers to Industrial Info's Global Market Intelligence (GMI) Project Database can click here for the project reports.
Another key to Europe's new gas strategy has been the AggregateEU mechanism, its first-ever international tender for joint purchasing of EU gas supplies. It has been leveraging the EU's collective buying power to secure better gas deals while securing supplies over the short-term in 2023. Last year, there were four short-term tendering rounds of joint gas purchasing that led to more than 42 Bcm of aggregated European gas demand being matched with reliable suppliers. Now, the Commission is launching its first mid-term tender, where buyers will be able to submit their gas demand for multiple six-month periods running from April 2024 to October 2029.
Executive Vice-President for the European Green Deal Maros Sefcovic said: "To face the energy supply and price crisis since Russia's illegal invasion of Ukraine, we have pulled together and pooled our gas demand, to attract better offers for European energy users from the international market. The new mid-term product we are launching today will continue to offer stability in the years to come. The worst should be behind us, but markets remain tight and we need to create as much security as possible."
Despite the ongoing war, Ukraine remains the main transit country for Russian gas entering Europe, to countries including Austria, Italy, and Slovakia, as well as to some non-EU Member States. However, all that will change at the end of this year. The existing transit agreement with Russian gas giant Gazprom ran for five years but will not be renewed, according to EU Energy Commissioner Kadri Simson speaking recently. "The EU is not interested in a prolongation of the gas transit arrangement with the Russians. There are alternative solutions to supply these countries which still receive some gas through the Ukrainian route".
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
The European Union (EU) relied on Russia for just 15% of its supplies in 2023, compared to 45% in 2021. It imported 43 billion cubic meters (Bcm) via Russia last year, compared to 80 Bcm in 2022 and 155 Bcm in 2021. A combination of more reliable pipeline and liquefied natural gas (LNG) imports were crucial to overcoming the EU's heavy dependency on Russian gas imports. As a result, Norway and the U.S. became the region's main gas suppliers in 2023, representing 30% and 19% of total gas imports, respectively.
"The energy crisis taught the European energy market a hard lesson," the European Commission stated. "The large share of Russian oil and gas imports in Europe's energy mix had created an over-reliance on a single, untrustworthy supplier. Ensuring greater diversity in the sources of our energy imports, means that if one source suddenly gets cut off, for whatever reason, the effects are felt less acutely. Trading with more predictable and stable energy partners greatly minimizes the risk of malicious disruptions to the energy supply."
Before Russia's illegal invasion of its neighbor Ukraine, Europe's total gas demand stood at around 400 Bcm per year, with only about 10% of it covered by domestic production. Russia's throttling of gas supplies in 2021 forced the EU to rethink its energy security and plans. The European Commission's REPowerEU plan was launched in May 2022 in direct response to Russia's energy blackmail, aiming to bolster Europe's energy security by saving energy, speeding up the clean energy transition, and diversifying the sources of its energy imports. In addition to reduced gas imports, the EU banned all coal imports from Russia and has cut oil imports by more than 90%. For additional information, see May 19, 2022, article - Europe Proposes $220 Billion Boost To End Reliance on Russian Energy.
LNG imports and the building of more terminals played an increasingly important role in Europe in the past couple of years, especially in Germany, which had hardly any infrastructure in place a few years ago. The country relied on Russia for 55% of its gas imports in 2021, but that has now been replaced by other sources and a massive drive to create an LNG network. Last year, the EU imported more than 120 Bcm of LNG. In 2023, the U.S. was the largest LNG supplier to the EU, representing almost 50% of total LNG imports. Compared to 2021, imports from the U.S. almost tripled in 2023. The leading LNG importers in the region are France, Spain, Netherlands, Belgium and Italy. Industrial Info is tracking 141 LNG-related projects in Europe worth more than US$12.5 billion. Subscribers to Industrial Info's Global Market Intelligence (GMI) Project Database can click here for the project reports.
Another key to Europe's new gas strategy has been the AggregateEU mechanism, its first-ever international tender for joint purchasing of EU gas supplies. It has been leveraging the EU's collective buying power to secure better gas deals while securing supplies over the short-term in 2023. Last year, there were four short-term tendering rounds of joint gas purchasing that led to more than 42 Bcm of aggregated European gas demand being matched with reliable suppliers. Now, the Commission is launching its first mid-term tender, where buyers will be able to submit their gas demand for multiple six-month periods running from April 2024 to October 2029.
Executive Vice-President for the European Green Deal Maros Sefcovic said: "To face the energy supply and price crisis since Russia's illegal invasion of Ukraine, we have pulled together and pooled our gas demand, to attract better offers for European energy users from the international market. The new mid-term product we are launching today will continue to offer stability in the years to come. The worst should be behind us, but markets remain tight and we need to create as much security as possible."
Despite the ongoing war, Ukraine remains the main transit country for Russian gas entering Europe, to countries including Austria, Italy, and Slovakia, as well as to some non-EU Member States. However, all that will change at the end of this year. The existing transit agreement with Russian gas giant Gazprom ran for five years but will not be renewed, according to EU Energy Commissioner Kadri Simson speaking recently. "The EU is not interested in a prolongation of the gas transit arrangement with the Russians. There are alternative solutions to supply these countries which still receive some gas through the Ukrainian route".
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
