UK imports of liquefied natural gas fell by 45% in 2012, the Economist Intelligence Unit said in a report.
According to the latest data from the UK’s Department of Energy and Climate Change (DECC), imports of LNG (which were almost 100% sourced from Qatar) fell by 52.5% in the first ten months of 2012.
Part of the reason behind the fall was weak gas consumption growth as the UK economy struggled to avoid recession, but another factor was above – average temperatures in the early part of the year, the Economist Intelligence Unit said.
Furthermore, the UK was competing for supplies with buyers in Asia, where prices were typically higher than in Europe.
The Economist Intelligence Unit said it expects a modest pick – up in the next two years, based on the need to fill gas storage as well as to offset persistent declines in domestic production.
However, given that the Asian market will remain the market of choice for most suppliers, we do not envisage UK consumption in 2013 – 14 reaching the level recorded in 2011.
Spain’s LNG consumption also weakened in 2012, largely because of a de cline in wider gas consumption, the Economist Intelligence Unit said.
Weak economic activity coupled with the price competitiveness of coal lead to sharply lower natural gas demand. Spain even sold on some of its contracted LNG cargoes in preference to flooding the local market with unwanted g as supplies.
The Economist Intelligence Unit said it expects Spain’s consumption to slip again in 2013, before stabilising at around 20bn cu metres/year in 2014, but this assumes that the EU takes action to support carbon prices at a higher level, which will start to undermine the competitiveness of coal.
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LNG World News Staff, March 1, 2013; Image: Dragon LNG