24 May 2024, 14:00
Benjamin Wehrmann

EU gas supply secure without Russia, German LNG plans oversized – researchers

Clean Energy Wire

The long-term supply of natural gas to Germany and the rest of the EU is secure even without supplies from Russia, the German Institute for Economic Research (DIW) found in an analysis. “Even if gas demand remains high until 2030, it would be possible to do without Russian natural gas,” the researchers said. Demand can be covered by pipeline and liquefied natural gas (LNG) imports from other countries and without having to expand Germany’s LNG import infrastructure, they said. “Supply security is therefore no obstacle to further EU sanctions - which so far exclude gas trading - against Russia” amid its ongoing invasion of Ukraine, the DIW said. The analysis considered different supply and demand scenarios and found that a gas shortage due to the loss of Russian supplies is not likely to occur in any of them thanks to trade with alternative suppliers including Norway, the US, Algeria, Nigeria, or Qatar.

Gas imports from Russia to the EU have fallen to a quarter of the level seen before the war in Ukraine started in February 2022, the DIW said. However, Russia continues to ship sizeable amounts of LNG to Europe and holds sway over the gas supply of some central and eastern European countries. The EU as a whole relies on Russia for 14 percent of its gas demand, while the share was 95 percent for Austria as of winter 2023/24. “But Germany and Europe would cope without Russian imports in the coming decades, even countries that still strongly depend Russian natural gas such as Austria or Hungary,” said researcher Franziska Holz. All countries in Europe had understood the need to diversify their gas supply, Holz argued, adding that greater LNG imports are needed in all analysed scenarios. In a footnote, the DIW said that according to the model, prices in EU countries would only increase moderately, by approximately 10 percent.

The current plans for expanding LNG infrastructure are “strongly oversized”, especially given the long-term perspective of phasing out natural gas use altogether, the DIW said. More import capacity would be needed only in an extreme scenario of high demand and tight supply, especially in Italy and Croatia, the DIW argued.

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