Europe:

• During the energy crisis, EU successfully secured gas supply and diversified gas imports away from Russia, with LNG playing a key role in this shift.
• Since 2022, over 50 bcm of new LNG import infrastructure eased supply congestion and helped narrow the price gap between European gas hubs and LNG spot prices.
• EU is the top global LNG import market. In 2023, EU Member States imported 134 bcm of LNG, making up 42% of total EU gas imports. The breakdown of LNG imports varied by country, with France being the largest importer at 30 bcm.
• EU LNG demand is likely to reach its peak in 2024. This is due to reductions in structural gas demand driven by the EU’s ambitious decarbonisation goals.
• In 2023, EU imported 18 bcm of Russian LNG, mostly via long-term supply agreements signed before 2022. At least 1 bcm (but possibly more) of this Russian LNG is re-exported to Asian markets through LNG reloads.
• The targeted gas demand cut scenario of REPowerEU (if it materialises by 2030) could shift EU's reliance on the spot LNG market, turning a 49 bcm ‘under-contracted’ status in 2023 to an ‘over-contracted’ position of 30 to 40 bcm between 2027-2030. Under-contracted means insufficient long-term contractual commitments increasing buyers’ reliance on the more volatile spot market. Over-contracted means the long-term contracts exceed the demand. Nonetheless, the surplus in long-term commitments shouldn't pose a burden thanks to the flexibility of free-on-board (FOB) contracts, which enable surplus LNG to be sold on the spot market or redirected elsewhere.
• Around 75% of the new regasification capacity added in the EU since 2022 are Floating Storage and Regasification Units (FSRUs). This allows for the potential repurposing or relocation of these floating infrastructure should their utilisation significantly decline.

US restrictions on LNG exports:

• Global LNG export capacity is massively expanding. By 2030, more than 200 million tonnes are projected to be added, equivalent to approximately 50% of the current annual LNG trade volumes. The United States will lead capacity construction, unaffected by the recently announced pause on granting new LNG export approvals.

Prices and indexation:

• Contrary to the general belief, the EU remains more dependent on long-term than on spot LNG contracts. TTF serves as the predominant indexation term for EU spot contracts (64%), but not for long-term ones (where Henry-hub and Brent indexations are dominant).