The great energy drift from east to west

6 mins read

Russia’s gas supplies continue to fall. Another country is already at the top of the list of German suppliers. This is what Europe’s gas supply could look like in 2030.

The map of German gas imports is changing rapidly. Before Russia’s invasion of Ukraine and Moscow’s curtailment of gas flows, Russia was by far the most important supplier. As recently as the month of the attack, in February, 37 percent of the natural gas consumed in Germany – including domestic production – came from there. Norway ranked second with 28, ahead of the Netherlands with 20 percent. A year earlier, Russia had dominated the scene even more, with 54 percent.

In the meantime, everything has changed. The Kremlin has voluntarily cut the inflow via Nord Stream 1 first to 40 and then to 20 percent of capacity. Soon, it plans to turn off the tap completely again. Supposedly for new maintenance, but the German government fears that there will be no more gas flow at all. By June, Russia’s share of gas consumption had already fallen to 26 percent, in July it was only 10 percent, and now it is just 9.5 percent.

According to figures from the energy association BDEW, June was also the first month in which the Russians relinquished their top position, to Norway. The Scandinavians now supply 38 percent of German demand, four times as much as the Russians. Even the Netherlands, with 24 percent, has two and a half times the Gazprom share.

Independent of Russian gas by summer 2024

And what does the future hold? Federal Economics Minister Robert Habeck (Greens) has announced that Germany will be largely independent of Russian gas by summer 2024. To make this happen, terminals and pipe connections for liquefied natural gas (LNG) are currently being built on the North Sea coast. The first facilities should be ready by the end of the year. To achieve this, there is a separate acceleration law.

At the same time, Habeck has been traveling around the world to find new sources, including Qatar. He and German Chancellor Olaf Scholz (SPD) are currently in Canada, one of the most promising LNG suppliers. However, this country lacks terminals on the Atlantic side, so the Federal Republic can only benefit indirectly from the large volume of liquefied gas: by Ottawa supplying the neighboring United States, which then supplies Germany.

This is exactly what the future is likely to hold: that the U.S. will replace most of the Russian gas. That’s the finding of an as-yet-unpublished study by the gas association Zukunft Gas together with the Energy Economics Institute of the University of Cologne (EWI). The paper examines the EU’s current and future gas imports and concludes that the U.S. will ship about 170 billion cubic meters toward Europe in 2030. And that’s because, it writes, “only they are in a position to expand their LNG export capacity to any significant extent.”

Qatar could become third most important supplier

In 2021, the U.S. supplied less than 20 billion cubic meters. The expected figure for 2030 is higher than current Russian supplies, which will be zero by then. Norway is expected to remain in second place among the most important European gas suppliers, but will contribute slightly less than the previous 120 billion cubic meters. Qatar could move into third place, far behind, with close to 40 billion. Africa’s importance is likely to decline, while that of other producer countries will increase.

“Europe will continue to have to import gas from other regions in the future,” clarifies the head of the gas association, Timm Kehler. “In order not to become dependent on one energy supplier, it is therefore particularly important to rely on different sources of supply.” For many potential exporting countries, he said, expansion would involve high investments, which would need to be secured with long-term supply relationships.

“This long-term nature would also be important for the German economy and German climate policy,” Kehler said. “Because part of this long-term supply relationship will be the transformation from today’s natural gas economy to a hydrogen economy.” This is precisely what the future hydrogen partnership with Canada envisions. Germany’s LNG terminals will also be designed for hydrogen in later times.

The German Technical and Scientific Association for Gas and Water (DVGW) sees the need for diversification. “Parallel to this, the development of a hydrogen economy must take place,” says the association’s chairman Gerald Linke. Canada could become a key supply country. It is important to convert the gas infrastructure for storing, transporting and distributing hydrogen, he says.

the main source of the news: https://www.faz.net

Salih Demir

Salih Demir lives in Germany. He is interested in politics and economy. Germany editor of -ancient idea- fikrikadim.com