FEATURE - Boosting competitive Liquid Natural Gas (LNG) markets
On 24 July, CEER published a Report on How to Foster LNG Markets in Europe. Given the increasing importance of LNG at a European level, CEER has identified different ways to foster LNG competitiveness at this level and, potentially, to raise the level of use of existing LNG assets, such as terminals.
What is LNG?
In a nutshell, Liquefied Natural Gas (LNG) is natural gas cooled to -162ºC where it becomes a liquid and can be economically stored and transported by ships over long distances.
Why is LNG important?
Europe has 29 LNG re-gasification terminals. LNG helps Europe’s security of supply and competitiveness – LNG diversifies our gas sources, which helps competition and in turn should lead to better prices for customers.
What’s in the CEER LNG report?
CEER's latest LNG report is packed with
- data and insights on the LNG outlook globally and in Europe
- interesting case studies from 4 countries (Lithuania, Italy, Belgium and Spain) that address challenges and promote competition and
- the European energy regulators' recommendations on how to overcome current and future challenges and develop an LNG market at EU level.
Main conclusions of CEER’s LNG report
CEER proposes several ways which could contribute to the fostering of a market for LNG in Europe, including considerations on transparency, LNG price references, the flexibility of LNG contracts, regional streamlining of infrastructures, innovation in terms of services and regulatory coordination. CEER also shows how flexibility allows a quick response and adaptation to changing market conditions whilst taking in to account the peculiarities and particular circumstances of each country but does not identify a need for further European-level regulation concerning access to European LNG terminals.
CEER’s main recommendations include:
• There is need for additional regulation of LNG terminals at European level.
• Attracting LNG to Europe could be further enhanced with the development of price references.
• CEER welcomes any market development that facilitates LNG's arrival in Europe, such as supply contract clauses flexibilisation and greater flexibility in the upstream part of the value chain.
• Regulatory regimes should ensure that there are no undue barriers to LNG market development, such as regimes for transmission that are not suited for LNG.
• Implementation of the Gas Target Model throughout Europe is still essential to provide price signals to attract LNG to the region when needed.