France dangers pointless investments in new LNG infrastructure because the utilisation charges of present terminals decline and gasoline use falls, in keeping with new analysis from the Institute for Power Economics and Monetary Evaluation (IEEFA).
The common utilisation charge of France’s operational LNG import terminals was 60% between January and August 2023, down on final yr’s charge of 74%, elevating doubts concerning the want for the brand new FSRU that just lately arrived on the port of Le Havre.
With a regasification capability of 5 billion m3, Le Havre FSRU is anticipated to be operational for the following 5 years.
Regardless of gasoline use declining 9% in 2022 attributable to increased costs and decrease shopper consumption, France can also be contemplating rising the capability of operational LNG terminals and worldwide gasoline pipelines.
“Gasoline and LNG infrastructure is at present in danger from falling demand and excessive and unstable costs,” stated Ana Maria Jaller-Makarewicz, creator of the report and an Power Analyst at IEEFA. “If demand continues declining, France and neighbouring European international locations threat investing in gasoline infrastructure that may fail to enhance safety of power provide and will grow to be underutilised.
“Though France has advocated for investing in initiatives that enhance European safety of provide whereas decreasing Russian gasoline dependency, paradoxically Russian gasoline is discovering another solution to attain French ports within the type of LNG.”
Whereas the acknowledged purpose of the Le Havre terminal is to partially offset the discount or cessation of gasoline provides from Russia, France continues importing Russian LNG and permitting transshipments destined for different markets.
Underneath a 23-year deal signed in 2015, power firm Engie imports 1 million tpy of LNG from Russia’s Yamal LNG undertaking for transhipment on the Montoir-de-Bretagneterminal on France’s west coast. Yamal LNG transhipments at Montoir-de-Bretagneincreased 150% y/y in 2022, and 2023 is anticipated to observe that development.
The US was the highest exporter of LNG to France in 2022, adopted by Russia, Algeria, Qatar, and Nigeria, in keeping with Kpler.
Learn the article on-line at: https://www.lngindustry.com/special-reports/10102023/ieefa-france-maintains-lng-buildout-amid-ongoing-russian-shipments-and-falling-gas-demand/