(Aug 4): The European Union is optimistic that winter liquefied natural gas (LNG) imports will help offset inventories that are at their lowest level for this time of the year in almost two decades after the Iran war drove up prices and disrupted summer stockpiling.

“The EU can count on significant spare LNG import capacity allowing additional imports during the winter months, complementing storage usage in providing flexibility,” a spokesperson for the European Commission, the bloc’s executive arm, said in emailed comments. 

Just a few months out from the start of the heating season, the EU’s storage facilities are only around 57% full, the lowest for this time of the year in records going back to 2009. European LNG imports have been dropping since April, with about a fifth of global LNG supply disrupted by the war, while Asian buyers snap up available cargoes.

While Europe has significantly increased its capacity to import LNG — and few in the market expect physical shortages — the region risks having to pay more when demand in winter spikes if global supplies remain tight. Europe will also have to compete with Asia and other regions to draw cargoes.

At its July meeting, the EU’s gas coordination group found there was no immediate concern about security of gas supply ahead of winter, according to a readout. Achieving storage levels of 80% would be sufficient to secure winter supply and is “technically achievable,” the spokesperson said.

The group is due to meet next in September, but the commission “is ready to convene a meeting on short notice when necessary,” according to the spokesperson. 

Uploaded by Evelyn Chan