- Europe is racing to set up floating units to handle imports of liquefied natural gas, as it tries to resolve an energy crisis.
- In response to sanctions, Russia has choked off its gas to Europe, which is scrambling to secure other supplies.
Europe is racing to set up floating terminals to handle imports of liquefied natural gas, as it tries to resolve an energy crisis driven by a Russian squeeze on supplies.
Finland and Italy will become the new home of at least one offshore LNG units by the middle of next year, their providers said this week.
Meanwhile, Estonia is on track for a November installation of the first floating LNG terminal built in Europe since the Ukraine war broke out, the New York Times reported.
Russia has choked off flows of its natural gas to Europe in response to war-related western sanctions, most notably slashing supplies via the Nord Stream 1 pipeline to 20% of capacity. Goldman Sachs analysts say the continent's energy crisis is likely to drag on until 2025.
The situation has sent European prices for natural gas soaring, and Dutch TTF natural gas futures have risen over 600% in a year, according to ICE Exchange data.
In response, countries across Europe are scrambling to set up floating storage and "regasification" units to help wean themselves off Russian imports and make up for the flow shortfalls, according to S&P Global Commodity Insights. About 25 new units, known as FSRUs, are in line for installation in the next few years, it said.
The terminals can take on shipments of LNG for processing and conversion from liquid to gas, for delivery to factories and homes via existing pipelines. They serve as an alternative to permanent onshore regasification facilities for imports, which typically take longer to install.
Excelerate Energy plans to relocate a floating LNG terminal from Argentina to Finland at the end of August, the US-listed company said in its quarterly earnings report Thursday.
"We support Europe's efforts to enhance its energy security through increased access to global LNG supply," Steven Kobos, Excelerate's CEO, said in a statement.
Meanwhile, Golar LNG said Thursday that a floating terminal it sold to Italian energy network Snam is set to take on imports from the start of 2023. The Golar Tundra unit — a converted LNG tanker — will dock off the west coast of Italy, it said in a quarterly earnings presentation.
Golar has also agreed to sell another tanker-turned-FSRU to the Italian government for its energy transition, but the go-ahead to proceed isn't expected until late this year at the earliest, it said.
"Snam is taking a decisive step to enhance the security and diversification of Italy's energy supplies, in line with its mission," the company's CEO Stefano Venier said in a June statement on the purchase.
Italy plans four floating gas import terminals in total, while Greece is aiming for five, according to S&P Global. But they're led by Germany — the country most likely to suffer the biggest shock from Russia's squeeze on gas supplies — which is lining up five new FSRUs alongside the two permanent onshore LNG import facilities.