the gas crisis is expected to last at least until 2027

Winter 2022-2023 foreshadows other difficult winters on the gas front. Since the attack on Ukraine by Russia on February 24, Europe has massively redirected its supplies: Russian natural gas has fallen from 40% to 9% of imports from the European Union (EU). To replace this gas, the Europeans rushed to sign long-term contracts with countries exporting liquefied natural gas (LNG). Germany has just concluded a fifteen-year contract with Qatar, announced on 29 November.

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This gas is first cooled to −161°C so that it can be transported by LNG tanker, before being converted back into gas in European ports. The sudden run on it explains the spectacular rise in gas prices on the world market, which have multiplied by five in a few months, reaching levels never seen before. This supply difficulty raises fears of power cuts in several European countries that rely heavily on gas-fired power plants, and is hurting industry, particularly in Germany, which had become accustomed to production indexed to relatively inexpensive Russian gas.

According to a study carried out by the think tank The Shift Project, this situation could last at least for the next five years. In a report intended for the Ministry of Defense and made public on Tuesday 6 December, the think tank chaired by engineer Jean-Marc Jancovici explains that 40% of the EU’s gas needs in 2025 risk not being met or rely on “unidentified sources of supply” nowadays.

Structural dynamics

By 2030, “the global deficit to be feared in the absence of a return to normal gas exchanges between the EU and Russia is of the order of 100 cubic gigametres, i.e. the equivalent of a withdrawal of Qatar from the gas market LNG”, can we read in the study. Based on data from the expert firm Rystad Energy, it emphasizes that the current gas crisis has nothing to do with the economic situation, but rather a structural dynamic.

“In reality, this crisis started in September [2021]at the time of the post-Covid recovery, and it was aggravated by the war in Ukraine”, emphasizes Matthieu Auzanneau, director of the Shift Project. Sanctions against Russia and attacks on the Nord Stream 1 and 2 gas pipelines have pushed Europe to look for other sources of gas. But the EU is not alone in this field: China has already succeeded in securing its supplies for 2025, unlike the Europeans.

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