Being a fairly recent discovery, liquefied natural gas has opened the doors to new possibilities and potentially faster, more secure access to hydrocarbon energy resources. Groomed to be the ideal transitional fuel that will power the world market’s evolution into a global economy that will be largely dependent on renewable energy, LNG has been the impetus behind reform not only when it comes to emissions reduction and climate action, but major infrastructural changes as well.

No longer limited by building projects that involve extensive transnational pipelines, LNG has the potential to be frozen and efficiently placed on ships, potentially saving national economies billions that would otherwise have to be invested in transporting natural gas through other more costly methods. The rise in LNG has definitely had a domino effect on the maritime industry by increasing the demand for better and faster shipping methods, thereby significantly boosting the logistics industry and other associated infrastructural projects.

“As a liquid, LNG takes up around 600 times less volume than gas at standard atmospheric pressure. This makes it possible to transport gas over long distances, without the need of pipelines, typically in specially designed ships or road tankers,” said a report titled “Liquefied Natural Gas and Gas Storage Will Boost EU’s Energy Security” by the European Commission. “When it reaches its final destination it is usually re-gasified and distributed through gas networks – just like gas from pipelines. LNG is also increasingly used as an alternative fuel for ships and lorries.”

With Europe striving to seek alternative sources of LNG as part of its commitment to sanctions against Russian energy supplies, there has been an increased demand on the continent to build FSRUs and other essential facilities needed to properly manage the delivery of LNG shipments.

“Europe has added six new LNG terminals since the beginning of 2022, plus one expansion, a previously mothballed terminal and a new floating storage regasification unit (FSRU) that is docked but not yet operational,” said a report titled “Europe’s LNG Capacity Buildout Outpaces Demand” by Lead Energy Analyst Ana Maria Jaller-Makarewicz from the Institute of Economics and Financial Analysis. “LNG import capacity is set to reach 406 billion cubic meters (bcm) in 2030, an increase of 143 bcm from 2021 levels, while gas consumption is forecast to fall to around 400 bcm as the continent pushes ahead with gas demand reduction policies. The utilisation rate of Europe’s LNG terminals averaged 58% between January and September 2023.”

According to a report from the Global Energy Monitor titled “Europe’s LNG import infrastructure glut set to more than double, jeopardizing green goals” by Baird Langenbrunner, there are proposals in the EU for a gas buildout of 227.2 billion cubic meters annually (bcm/y), which would increase the EU’s current maximum import capacity by 136%. Pipelines will still play a critical role with plans to build extensive transmission pipelines within the continent, with an additional annual gas pipeline import capacity of 60.5 bcm being proposed in Europe.

The Global Energy Monitor report elaborated that the infrastructure overhaul in Europe will cost between €53.5 billion and €22.1 billion to build the necessary LNG terminals and an additional €31.4 billion to have the essential pipeline infrastructure set up. The Europeans shouldn’t close with wallets yet with €4.2 billion needed for projects that are currently under construction.

The same report noted that Greece, Italy, and Germany combined make up an estimated 53% of costs. Infrastructural reform in the EU was been on the top of the agenda for the EU as the nations worked to implement and accelerate up to 30 LNG terminal projects. The accomplishments have been impressive with 35.2 bcm/y of gas import capacity being commissioned between eight LNG terminal projects, in addition to 11.1 bcm/y in transmission pipelines from January 2022 to February 2023.

Egypt has already masterminded its own infrastructural reforms to carve out its future as the region’s main hub for LNG. According to a report from Al Ahram titled “Egypt Expected to Maintain High Volumes of LNG Delivery to Europe: EU Energy Commissioner”, Egypt has up to 7,000 km in pipelines, in addition to a distribution network that extends 31,000 km, and 29 gas-treatment plants. Even though the current infrastructure may fall short of meeting the demand for LNG abroad, Egypt is already well on its way to being a major supplier for many markets in Europe and around the world, with its efforts in accelerating the projects needed to boost its LNG export capacity. The country has also been active in expanding its gas export infrastructure and capabilities with its recent agreements with both Jordan and Israel.

According to a September 2023 report from GIS by Carole Nakhle titled “Egypt Gas Exports Under Threat”, Egypt is a nation capable of providing close to 5% of Europe’s gas consumption, which was achieved in 2022 through its two onshore LNG liquefaction plants and terminals in Idku and Damietta. Though these facilities have given the country the potential to export LNG since 2005, more is needed for Egypt to perform at its full potential.

With an energy economy that still depends mostly on fossil fuels, enhancing the efficiency of logistics and supply chain processes has become vital in ensuring the punctual and secure arrival of energy supplies in various markets. LNG, for this reason, has emerged as a positive influence in the market with a solid transportation method that will be less costly and more reliable. LNG is ready for the global market, but what remains to be determined is whether global infrastructure is really ready for LNG.