Europe’s gas plans may hinder Australia’s LNG import

As they compete for vital infrastructure, Europe’s race to replace Russian gas supplies has put Australia’s plans for five gas import terminals in jeopardy, heightening the danger of a supply shortfall in Australia’s populous southeast in the next two years.

To replace pipelined gas from Russia, which has been damaged by sanctions during the Ukraine conflict, France, Germany, and the Netherlands, among others, will need to import liquefied natural gas (LNG).

European customers are snapping up the floating storage and regasification units (FSRUs) required to convert LNG to gas, leaving limited room for Australian import projects aimed at filling a gas supply shortage predicted by 2024.

Despite being the world’s top LNG exporter, Australia’s primary gas reserves are located far from Sydney and Melbourne, as well as other major cities in the southeast, and the output is primarily related to contracts with Asian customers.

As a result, the government is moving forward with LNG import projects, although most have yet to secure clients or build regasification infrastructure, and European consumers are beating them to FSRUs.