Lockdowns imposed due to the COVID-19 pandemic have impacted natural gas and liquified natural gas (LNG) consumption across Europe.
Verdict has conducted a poll to analyse the key hurdles for the European gas and LNG sector in 2021. Analysis of the poll results shows that poor economic recovery in the region is the key hurdle for the sector, as opined by a majority of 48% of the respondents.
Fall in gas demand was voted as the key hurdle by 28% of the respondents, while 14% voted for another potential warm winter to be the key hurdle.
Furthermore, 9% of the respondents voted low LNG demand due to high underground gas storage levels to be the key hurdle.
The analysis is based on 215 responses received from the readers of Offshore Technology, a Verdict network site, between 21 August 2020 and 30 March 2021.
Recovery of European gas and LNG sector in 2021
The global gas demand registered a drop of approximately 2.5% or 100 billion cubic metres (bcm) in 2020, according to the International Energy Agency (IEA). Market volatility due to the coronavirus pandemic followed by mild winter impacted the gas demand last year. Regional gas markets are, however, expected to be better supported through 2021, forecasts ING Bank.
The demand for gas in Europe is expected to rise by 2% in 2021, owing to the recovery of commercial and industrial activity and average heating requirements during the winter season. The demand, however, is expected to still stay below the pre-pandemic levels.
The excess gas stored in European storage facilities during the pandemic was utilised during the cold winter in the northern hemisphere. The rising demand for LNG will adjust the oversupply in the market in the first half of 2021, according to Fitch Ratings.