By Marwa Rashad
LONDON – RWE, Germany’s largest energy producer, mentioned Europe wanted extra funding in liquefied pure fuel (LNG) terminals on land to safe shipped gasoline provides from world fuel producers in the long run.
However RWE Chief Govt Andree Stracke advised the Gastech convention in Milan that he didn't assume Europe would abandon Russian fuel ceaselessly due to the fee to industries and households.
Europe is dealing with its worst fuel provide disaster ever, with vitality costs hovering and German importers even discussing attainable rationing within the European Union’s greatest economic system after Russia decreased flows westwards.
Russia’s Gazprom on Friday mentioned the Nord Stream 1 pipeline, Europe’s main provide route, would stay shut as a turbine at a compressor station had an engine oil leak, sending wholesale fuel costs hovering.
Analysts estimate Europe might want to import round 200 million tonnes of LNG over the following decade to section out Russian fuel. Germany, Europe’s greatest importer of Russian fuel, would want round 40 million tonnes of LNG to switch the 50 billion cubic meters (bcm) of the pipeline fuel it used to get from Moscow.
“If you wish to convey extra LNG in the long run into Europe, you want extra investments in land primarily based terminals as nicely. FSRUs (floating storage) are speculated to be a brief time period answer” Andree Stracke mentioned on the worldwide Gastech convention in Milan.
Germany in Might leased 4 floating storage and regasification models (FSRUs) for the import of at the least 5 bcm a yr every of seaborne fuel, of which two are attributable to turn into obtainable this yr. It plans to constitution one other 5 bcm capability FSRU for winter 2023/24, bringing the overall quantity to 5.
Stracke mentioned he doesn’t consider Europe will head away type Russian fuel ceaselessly.
“The world lives in cycles. I doubt that Europe can afford these vitality costs for an extended interval as nicely,” he mentioned.
EU ministers will talk about in a gathering on Friday a lot of choices together with a value cap on imported fuel, a value cap on fuel used to supply electrical energy, or quickly eradicating fuel energy vegetation from the present EU system of setting electrical energy costs.
Stracke mentioned that imposing a value cap won't ever clear up the vitality disaster, including that the attainable answer can be demand discount.
“Politicians attempt to clear up the pricing downside by placing caps in however this may lead to much less demand by definition.
It's good to have some demand destruction as a result of provide might be faster. An excellent cause for demand destruction is the excessive pricing, however we all know that is politically troublesome,” he mentioned.
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