MadridThe war in Ukraine and the resulting energy crisis have generated situations that are difficult to imagine, particularly in the global energy market and, above all, in natural gas. As a result of the Russian invasion and the deployment of sanctions in the country of Vladimir Putin, the country collared the European Union through the reduction of the supply of natural gas. The problem was capital, since it was the main supplier of natural gas to the European Union (55%) and, in particular, to the northern and eastern countries, as is the case with Germany, and during the last months there have been rumors of possible power cuts, especially in winter.
The importation of liquefied natural gas by ship to Spain
Origin and volume of power in GWh of LNG that has arrived by ship in Spain throughout 2022
Faced with this scenario, one of the solutions that Europe opted for last year was to store natural gas. In other words, fill the warehouses before winter. This, however, opened the door to a battle for this fossil fuel and especially for liquefied natural gas (LNG). A fuel that has not only been sold to the highest bidder – an element that caused the price to skyrocket – but its search and capture has generated atypical maritime routes, with Spain as the protagonist.
In 2022, a total of 318.893 GWh of LNG in 338 ships originating from
18 countries
In 2022, a total of 318.893 GWh of LNG in 338 ships originating from
18 countries
In 2022, a total of 318.893 GWh of LNG in 338 ships originating from
18 countries
Step by step Liquefied natural gas (LNG) is, as the name suggests, fossil fuel, but in liquid form. Normally, it is in this state that it is transported around the world, via methane ships. The peculiarity is that the destination can only be countries with regasification plants, which allow receiving and storing liquefied gas and, at the same time, regasifying it (returning it to the gaseous state) to send it through pipelines or store it – it underground, in underground warehouses.
Liquefied natural gas is much more expensive than if it is in a gaseous state due to its treatment and transport
This whole process, which seems easy to explain, has one drawback: a much higher price than that of natural gas, both in terms of treatment (very low temperatures are needed) and transport (the longer the sea route, the higher the price). For this reason, in recent years this business (and the infrastructures that surround it, such as the regasifiers) had passed without pain or glory, as the ARA explained. The countries preferred to supply themselves with natural gas through gas pipelines: Spain did so with Algeria and Germany with Russia.
40% more LNG in the plants
When we say that in the middle of this scenario Spain has been in the center of attention, it is precisely because of its ability to receive LNG. The State has 40% of the LNG regasification capacity in all of Europe thanks to its seven plants. One of them, the largest, is in Barcelona, where over the course of 2022 up to 58 methane ships were unloaded there, well above the 47 that came there in 2021, according to data from Enagás’ monthly bulletins compiled by the ‘NOW. In the State as a whole they unloaded 338 ships (in 2021 there were 254 ships, which means that last year traffic rose by 33%).
This involved in fact use the regasification plants to the maximum. The arrival of more ships resulted in an increase of more than 40% in the volume of liquefied natural gas offloaded throughout 2022: while 318,893 GWh of liquefied natural gas were offloaded last year, in 2021 they imported up to 227,180 GWh (an increase of 40%), according to data from Enagás.
At the end of the year some ships had to wait on Spanish shores to unload. The reasons: very crowded plants, a hot fall and energy efficiency measures that led to a drop in natural gas consumption.
18 importing countries
Another change is the origin of the fossil fuel. Traditionally, in the Spanish case, the main source has been Algeria, from which companies such as Naturgy have bought gas fuel. But the roles (and the form) have changed. As an example, in 2022 71% of all natural gas that arrived in the State was liquefied (in 2021 it represented 51% of all fossil fuel received during the year).
Over the course of last year, Spain received a total of 128,749 GWh of liquefied natural gas from the United States (118% more than in 2021), which made the country the main importer of gas, overtaking Algeria – with whom political relations were strained by the Sahara and which saw the State buy 76% less LNG from it: from 23,425 GWh in 2021, to only 5,447 GWh in 2022–.
But these are only two of the eighteen countries that exported liquefied gas to Spain. Some origins are unprecedented, as is the case of South Korea, which has not appeared in the import register since 2004, when the Corporation for Strategic Reserves of Petroleum Products (Cores) keeps track of it. Other places have been Nigeria, a regular supplier of the State, but also Trinidad and Tobago, Qatar, Peru or Indonesia.
Despite the war, who has also bought more LNG than ever in Russia. Imported liquefied gas has grown to 53,859 GWh (45% more than in 2021, when 37,027 GWh were imported). A significant part of this volume came in June. Sources in the sector explain this, among other reasons, by the shutdown of four French regasification plants. A fact that forced some ships to divert and unload in Spain. Specifically, four of the eight Russian ships unloaded in Spain for this reason, the same sources say. From the Ministry of Ecological Transition, the marketing companies were asked to reduce the consumption of Russian gas as much as possible and to diversify the contracts.
All for Spain?
It cannot be inferred that all ships unloading in Spain carry liquefied natural gas for consumption in the State. In fact, just as unloading has grown, so has the loading of this fuel by private operators who buy the liquefied gas here to take to other countries. The amount of LNG that Spain re-exported in 2022 grew by 40%, from 17,125 GWh in 2021, to 24,532 GWh in 2022. This market, 7% of what Spain imported, is smaller because few countries have capacity to regasify: China, Japan or France can do it.
In any case, the countries have put their batteries on. Italy, for example, has installed floating regasifiers and, although the marketers do not detail the destination of the liquefied gas, much of the LNG that has been exported from Spain has gone to that country, mostly via small ships, confirm sector sources in the ARA. Germany, for example, also loaded a ship with LNG. But the LNG that has left Spain has also crossed the Atlantic to reach Brazil or Puerto Rico.