Liquefied natural gas helps make Europe’s gas supply more secure as it doesn’t rely on existing pipeline infrastructure, allowing EU countries to diversify the sources of their imports, the European Commission (EC) said in a recent report.

The EU's gas demand is around 350 bcm per year. Natural gas currently represents around a quarter of the EU's overall energy consumption. About 26% of that gas is used in the power generation sector (including in combined heat and power plants), and around 23% in industry. Most of the rest is used in the residential and services sectors, mainly for heating buildings.

Ensuring that all EU countries have access to LNG markets is a key objective of the EU's energy union strategy as it can contribute to diversifying gas supplies, thus improving EU energy security in the short-term, while more sustainable solutions towards full decarbonisation by 2050 are established.

Increased LNG imports from trustworthy global partners have helped reduce the EU’s reliance on Russian pipeline gas. The 137 bcm of pipeline gas imported to the EU from Russia in 2021 was reduced by 82% to 25 bcm in 2023. (Source: European Commission calculation based on LSEG (Refinitiv) and ENTSO-G data).

Following the Russian invasion of Ukraine in February 2022 and its weaponisation of Europe’s energy supply, the share of Russian pipeline gas in total EU energy imports has fallen dramatically from 41% in 2021 to about 8% in 2023.

This has been replaced mainly by LNG from the US, which supplied 46% of EU LNG imports in 2023 and reliable pipeline gas imports from Norway (49% compared to 30% in 2021), North-Africa (19%) and Azerbaijan (7%).

The US is playing an increasingly important role in the EU’s gas supply. At the end of March 2022, the EU and the US adopted a common declaration on increasing LNG trade, and expressed interest in further increasing EU LNG imports from the US by 15 bcm in 2022 compared to the previous year. This goal was reached at the end of August 2022, 4 months in advance of planning.

Several EU countries are increasing their LNG import capacity by accelerating investments in LNG terminals. The EU’s LNG import capacity grew by 40 bcm in 2023 and an additional 30 bcm is expected to become operational in 2024.

Based on the EU’s list of Projects of Common Interest (PCIs), the LNG strategy includes a list of key infrastructure projects which are essential to ensure that all EU countries can benefit from LNG.

LNG terminals, like other energy infrastructure, are financed through end-user tariffs (paid for by all gas consumers as part of their monthly gas bill).