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IEA: EU Gas Crisis May Worsen in 2023

The EU’s energy crisis may last through to 2024, warns the International Energy Agency (IEA), during a recent statement contained in its new report on the future of the energy markets.

According to their latest assessment, Europe will experience natural gas shortages through the winter of 2023-2024 – because EU countries will likely have difficulty refilling their storage facilities during the summer months. To compound the problem, most countries will have nearly depleted their emergency reserves in order cope during the winter of 2022-2023.

Aside from the EU’s self-imposed economic suicide pact in the form of anti-Russia sanctions and cutting off its supply of affordable and reliable Russia gas, an increase in global demand next year will hit the EU especially hard, as European governments struggle to “structurally reduce gas demand” across the region.

A true recipe for disaster… 


The IEA says…

Europe could face a gap of as much as 30 billion cubic metres (bcm) of natural gas during the key summer period for refilling its gas storage sites in 2023, the IEA said in new analysis published today, highlighting the need for urgent action by governments to reduce gas consumption amid the global energy crisis.

The new report – Never too early to prepare for next winter: Europe’s gas balance for 2023-2024 – shows that gas storage sites in the European Union are now 95% full – putting them 5% above the 5-year average fill level. But the report cautions that the cushion provided by current storage levels, as well as recent lower gas prices and unusually mild temperatures, should not lead to overly optimistic conclusions about the future.

The process of filling EU gas storage sites this year benefitted from key factors that may well not be repeated in 2023. These include Russian pipeline gas deliveries that, although they were cut sharply during 2022, were close to ‘normal’ levels for much of the first half of the year. Total pipeline supply from Russia to the EU in 2022 is likely to amount to around 60 bcm, but it is highly unlikely that Russia will deliver another 60 bcm of pipeline gas in 2023 – and Russian deliveries to Europe could halt completely.

On top of this, China’s lower liquefied natural gas (LNG) imports in the first ten months of this year have been a key enabler of higher LNG availability for Europe to compensate for the drop in gas deliveries from Russia. If China’s LNG imports recover next year to their 2021 levels, this would capture over 85% of the expected increase in global LNG supply. And global LNG supply is expected to increase by only 20 bcm in 2023, with about one-third of the growth coming from the United States. The expected rise in global LNG supply next year is about half the average increase during the 2016-2019 period and much less than the likely decline in Russian pipeline deliveries to the EU next year.

In the event of a full cessation of Russian pipeline gas supplies to the EU and a recovery of Chinese LNG imports to 2021 levels, the new IEA analysis shows that Europe could face a challenging supply-demand gap of 30 bcm during the key period for refilling gas storage in the summer of 2023. This gap could represent almost half the gas required to fill storage sites to 95% capacity by the start of the 2023-24 heating season…

Continue this report at the IEA

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