By Marwa Rashad
AMSTERDAM (Reuters) – Europe has successfully survived the worst energy crisis in decades thanks to demand reduction and a couple of mild winters, but the continent’s ability to survive a cold winter hasn’t been tested yet, senior energy executives said on Tuesday.
Executives from top energy firms including France’s TotalEnergies (LON:) and Germany’s RWE (LON:) said during talks at the Europe Flame Gas and LNG Conference in Amsterdam that in addition to the temperature, major risks next winter would include a pick-up in Chinese demand and supply outages.
WHY IT’S IMPORTANT
EU nations have raced to replace Russian fuel followingMoscow’s invasion of Ukraine in 2022, and LNG imports have beeninstrumental in replacing a substantial share of Russian gaspipeline supplies.
In 2023, Europe became the world’s biggest importer of LNG,surpassing China, importing 134 billion cubic metres (bcm)of LNG.
KEY QUOTES
CARA MACDONALD, HEAD (LON:) OF LNG & CLEAN FUELS SUPPLY AT GERMANY’S RWE SUPPLY AND TRADING
“Had we had a cold winter, or if we have a cold winter, this year (or) next year, the amount of flexibility on the demand side will diminish more significantly.”
“We (in Europe) have managed it through demand (reduction), but can we keep on doing that?… There’s limited ability to increase flexibility on the supply side.”
PATRICK DUGAS, HEAD OF LNG TRADING AT TOTALENERGIES
“Europe is still a premium market (like) Asia, so we may see in the coming months or years competition between the two basins in Europe and Asia in terms of attractiveness of the LNG cargoes in terms of economics.”
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“It is important to highlight the key component of supply/demand worldwide, which is China. The recovery of China will be a feature of the (LNG) landscape of the next few years.”
MARCO SAALFRANK, HEAD OF CONTINENTAL EUROPE MERCHANT TRADING AT AXPO SOLUTIONS
“In reality, Europe didn’t test a very difficult situation, because it only had mild winters. If the next winter will be very cold, and there will be a situation (like) a hurricane in the United States or something, then it’ll be different.”
“You see that Europe is doing well. We have good storage levels and everything is fine, but again, this can change and very rapidly.”
