Europe faces a much tougher task to rebuild gas stocks next year compared with this winter, meaning energy bills are likely to stay high and governments could have to implement painful rationing measures they have so far avoided.
Previously dominant, gas supplies from Russia have since late August been greatly reduced, meaning the task of refilling storage will be much harder when levels are depleted by early next year.
"Many of the circumstances that allowed EU countries to fill their storage sites ahead of this winter may well not be repeated in 2023," Fatih Birol, Executive Director of Paris-based International Energy Agency said last week.said Europe could face a shortfall of almost 30 billion cubic metres next winter, equivalent to nearly 7% of 2021 demand.Before Russia invaded Ukraine in February, prompting Western sanctions, Russia provided around 40% of Europe's gas.
Analysts at Wood Mackenzie forecast up to 25 bcm less Russian gas will reach Europe for the 2023 filling season from April to end September when summer temperatures reduce heating demand. "The focus will continue to be on demand-side reductions next year, with the scale of the challenge dependent in part on where stocks sit coming out of winter," Luke Cottell, senior analyst at Timera Energy, said.
Europe and Britain's LNG import capacity will increase around 25% by the end of 2023 compared with 2021 levels, data compiled by the U.S. Energy Information Administration showed.This year, lower demand and high prices meant Chinese buyers largely shunned the spot LNG market and some cargoes destined for Asian buyers were divertedThat may not happen next year, meaning Europe would face fierce competition for LNG that would drive up the cost.
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