LNG and infrastructure interconnectivity remain key to Europe’s long-term gas supply security, according to a new report from Fitch Ratings.
The worst of the energy crisis in Europe, including gas rationing, has been avoided in the short term, in line with Fitch’s expectations, due to a combination of ample LNG flows and mild weather.
Skyrocketed E.U. gas prices reduced European demand by more than 10 percent in 2022, also in line with Fitch’s expectations. The report expects demand to drop further in 2023, taking the total decline to 15 percent from 2021. The extent of price-driven demand erosion has varied by country.
LNG has been, and will continue to be, a key alternative source of gas to replace reduced Russian pipeline flows. Fitch’s analysis still assumes zero Russian gas flows to the E.U. fr