Source: GIIGNL Annual Report 2023 Edition.
Over the past two decades, the European Union has become increasingly reliant on liquefied natural gas (LNG) as a cleaner alternative for propulsion. Beyond the implementation of the relevant IMO rules (i.e., MARPOL Annexe VI), the creation of Emission Control Areas (ECAs) and the “Fit for 55” initiative provided an impetus for increasing the adoption of LNG as a transitional fuel for the maritime sector (European Commission, reviewed 2020).
However, geopolitics played the most critical role. The 2022 Russian invasion of Ukraine was a watershed event. European dependence on Russian pipeline gas plummeted, but LNG imports rose sharply. Between 2021 and 2023, EU LNG imports increased by over 60%, with the US accounting for almost 45% of EU imports.
Today, there are several large-scale LNG terminals in the EU, most of them in Spain. There are also multiple new LNG projects – including floating storage and regasification units (FSRUs) – at various stages of planning or construction, work on which will contribute to contract flexibility.