Europe has pivoted towards the consumption of high-cost liquefied natural gas (LNG), with Russia gradually halting the flow of natural gas since the beginning of the Ukraine war.
The direction of LNG on the spot market has also shifted from markets in Asia to European markets.
According to the data collated by Anadolu Agency from financial market statistics and infrastructure provider Refinitiv, Europe's LNG imports increased 86 percent from June to August this year compared to the same period last year.
European countries, which fear being left "in the dark" next winter due to the energy crisis after the Ukraine-Russia war, are buying more LNG despite the high costs.
European countries imported about 21 billion cubic meters of LNG in the June to August period of last year, but this surged to 39.14 billion cubic meters during the same period this year.
Europe's LNG imports increased from 71 billion cubic meters last year to 116 billion cubic meters in the first eight months of this year.
Expansion in LNG capacity and trade
Last year saw 380 million tons of LNG traded worldwide, from which Europe purchased about 80 million tons.
Seventy percent of LNG exports are made under long-term contracts on the global market, but the remaining 30 percent are sold on the spot market, a mechanism which is becoming more attractive to European countries that have not actively traded in LNG previously.
Terminals in Europe currently have an annual LNG purchase capacity of close to 150 million tons.
Europe, which imported 85 million tons of LNG in 2019, bought 82 million tons in 2020, and this capacity is expected to increase further by the end of this year.
As of the end of April 2022, there were 641 LNG ships worldwide, out of which 45 served as floating LNG terminals.
This global fleet is also enlarging by 30 percent, with 216 ships under construction, indicating that the LNG trade will, correspondingly, expand.
All LNG terminals on the global market, which have an average carrying capacity of 170 to 180 thousand cubic meters, have a regasification capacity of 901 million tons.
A total of 40 countries have LNG terminals with the addition of a gasification capacity of 50 million tons in 2021.
As of April 2022, 19 new LNG terminals, 12 new floating LNG terminals and 13 existing terminals will ensure an increased regasification capacity of close to 165 million tons.
The countries with the highest gasification capacity are Japan, South Korea, China, Spain, the US, India, United Kingdom, and Trkiye.
Europe's LNG purchases constrain Asian supplies
There has been a marked fall in LNG imports to Asia this summer relative to last year, dropping from 90 billion cubic meters to approximately 83 billion cubic meters.
Energy experts concur on a decrease in the amount of gas bought on the Asian spot LNG market, where previously the largest LNG purchases were made. The fall is due to competition from Europe where purchases increased following the Russian invasion of Ukraine.
China, which imported approximately 26 billion cubic meters of LNG in the June to August period last year, showed a 24 percent drop in imports to about 19.7 billion cubic meters of LNG in the same period this year.
Accordingly, China could lose its title as the world's largest LNG importer this year, having surpassed the historic champion, Japan, last year.
Japan, with its rise in LNG purchases to 25.5 billion cubic meters of LNG in the June to August period from 25 billion cubic meters of LNG in the same period last year, is destined to become the global LNG import leader again.
In the Asian region, the volumes of LNG cargo purchased by South Korea and Taiwan over the same period remained stable.
However, Pakistan, which bought 2.68 billion cubic meters of LNG in the June-August period last year, saw a fall in imports to 2 billion cubic meters in the same period this year.
While Indonesia imported 1.5 billion cubic meters of LNG in the summer of last year, it purchased 1.3 billion cubic meters of LNG during the same period this year.
Imports to India, one of the major gas consumers, over the same three months last year reached 7.84 billion cubic meters and fell to 6.89 billion cubic meters during the same period this year.