January 24, 2019 / 2:43 PM / 10 months ago

French LNG imports soar as Australia and United States boost capacity

PARIS (Reuters) - French liquefied natural gas (LNG) imports soared last year as Australia, the U.S. and Russia brought more LNG to world markets, French gas network operator GRTgaz said on Thursday.

In 2018, France imported 117 terawatt hours (TWh) of LNG, the highest level in seven years, as shipments rose 13 TWh or 45 percent at the Montoir LNG terminal in Brittany and 2 TWh or 25 percent at the Dunkirk terminal in northern France. Imports at the Fos terminal on the Mediterranean coast were unchanged.

“LNG has come back,” said GRTgaz director Thierry Trouve told reporters.

Trouve said that new LNG gasification plants in Australia and the U.S. - as well as shipments from Russia’s Yamal plant - had reduced the price difference between LNG in Europe and Asia, as well as between LNG and pipeline gas.

“While all this new LNG may not necessarily come to France - we saw no shipments from Australia, for instance - it means that more LNG from the Middle East comes to Europe,” he said.

French gas imports through pipelines - mainly from Norway, the Netherlands and Russia - in 2018 fell slightly by 7 TWh to 447 TWh, he said.

Gas transit shipments to Switzerland and Italy, at 33 TWh, were the highest in six years as problems with a German pipeline meant that more gas went via French pipes, but shipments to Spain were down 12 TWh or 27 percent.

Trouve said this illustrated why French and Spanish energy regulators earlier this week rejected the STEP project to boost cross-Pyrenees gas interconnection capacity.

“For years, the Spanish argued this project would save France and Europe from a Ukraine crisis as gas from Spain would provide security of supply for the rest of Europe,” Trouve said.

He said the cross-Pyrenees flow of gas was mostly from north to south and that in the south-north direction the pipelines were not saturated.

“We don’t see the need for this project,” he added.

French gas consumption fell five percent to 442 terawatt hour (TWh) in 2018 compared with the previous year due to high temperatures and less use of gas-fired power generators.

Industrial gas demand rose for the fifth year in a row as more industries switched from oil and coal power generation to gas, GRTgaz said, adding that conversion to gas power generation represented 2.5 TWh of consumption.

Reporting by Bate Felix and Geert De Clercq; Editing by Sudip Kar-Gupta

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