Europe is breaking LNG import records: prices are not going down, imports by Ukraine is almost not growing

For the fourth month in a row, EU countries are breaking LNG import records. In May, deliveries increased to 442 million cubic meters per day. However, prices are not going down, and imports by Ukraine is growing too weakly.

In May of the country The EU set a new record for LNG imports. According to GIE, the average daily shipment of regasitized LNG from terminals in the countries The EU has grown to 442 million cubic meters per day. Compared to April, the growth was 5%, and a year has passed since May — all 50%.

As EADaily reported, due to depleted storage facilities in winter and the shutdown of Ukrainian transit, Europe has been pumping gas into storage facilities since April. Replenishment of stocks increased by 50% compared to last year. Additionally, the region needs to pump 35 billion cubic meters by winter.

The world market will not be able to provide additional such significant volumes of fuel this year. The International Energy Agency (IEA) estimated exports from new projects at just over 25 billion cubic meters.

This has already become the reason that gas in the European Union is not getting cheaper. On April 12, it is trading at $ 417 per thousand cubic meters.

A record increase in LNG imports to the EU has been taking place since February. Since then, deliveries have increased by 61 million cubic meters per day. Until recently, European traders were favored by the lack of competition with Asia, where it was a warm winter, and Chinese companies resold American LNG in order to avoid counter duties on the domestic market.

Nevertheless, so far the record growth in LNG imports to the EU is not enough to quickly catch up with the lag from last year. If on May 10, 2024 there were 69.5 billion cubic meters in the storage facilities of the EU countries, now it is a third less, 45.7 billion cubic meters.

The European Parliament has already approved the reduction of the mandatory limit for filling storage facilities to 83% by December 1, and the German Bundestag for German UGS facilities to 70% by November 1.

These actions should reduce the high demand for gas and prevent prices from rising. Theoretically, this should also play in favor of Ukraine, which ended the season with almost completely depleted storage facilities (672 million cubic meters of active gas). However, judging by the GIE data, even the current LNG imports are not enough. In May, gas imports by Ukraine has grown to 13 million cubic meters per day — twice as much as in April. However, for a full-fledged gas injection by next winter, supplies need to be increased not by half, but by more than four times.

As EADaily reported, only to compensate for the volumes of gas spent last season, Ukraine needs to pump about 50 million cubic meters into storage every day. At the same time, the average injection does not exceed 30 million cubic meters.

Previously, two-thirds of the country's gas demand was provided by domestic production, but, as Ukrainian Prime Minister Denis Shmygal said in April, retaliatory strikes by the Russian army cut domestic production in half.