LNG
As we approach the 4-year anniversary of the invasion of Ukraine, the EU is gearing up to fully cut Russian gas supplies by 2027. This should slightly increase LNG imports and impact flows across the continent, since LNG terminals in North-West Europe and in Eastern Europe (Poland, Croatia, Greece) act as a key gas supply source for Europe.
Security of supply concerns are easing now that the build-up of LNG regasification capacity is reaching its end and the liquefaction capacity wave from Qatar and the USA is reaching commissioning. The average utilization rates in Europe reached ~50% in H1 2025 and it could significantly increase in a cold winter or in case of pipeline supply disruptions due to increased reliance on LNG imports.
In the long run, as production of natural gas decreases in the EU + UK + Norway, gas supply will significantly change and increasingly rely on locally produced biomethane and on LNG imports:
- For infrastructure operators, the question of the role of LNG by 2050 and beyond is becoming important to long-term planning. Many terminals in North-West Europe and the UK have secured bookings until 2040 to 2050, highlighting the interest in long-term regasification capacity bookings in North-West Europe. However, infrastructure facing significant CAPEX in the coming years will need to keep securing long-term capacity or face the risk of asset stranding.
- For shippers, the value of European regasification capacity comes into sharper focus: upstream players (notably liquefaction operators) are showing increasing interest in booking capacity and traders are willing to take stakes in terminals, in addition to utilities and portfolio players booking capacity to secure their supply chain and maximize optionality value.
Storage
The year-round reliance on significant LNG supply has been weakening winter-summer spreads and the intrinsic value of storage around Europe, leading significant seasonal storage capacity to not be booked nor filled in spite of filling mandates. The impact on UGS operators varies by geography: it is relatively limited in France due to the revenue cap regulation and in the UK due to limited storage capacity, whereas in Germany some operators have now applied to remove significant capacity from operation (e.g. Uniper in Breitbrunn).
This situation where price signals do not reflect the value of storage for security of supply is leading the industry and public players to consider strategic storage obligations similar to those currently in place e.g. in Italy:
- Significant reduction in storage capacity in the short run could threaten Europe’s ability to face a cold winter
- Increased reliance on LNG supply and rising geopolitical tensions could warrant gas stocks for the same reasons as oil stocks
Networks
As the first elements of hydrogen transmission networks are being commissioned (e.g. 400km of H2 transmission network commissioned by Gascade in December 2025), the path forward for transmission infrastructure is becoming clearer, although it remains conditioned on uncertain evolutions of methane and hydrogen demand.
By contrast, the planning for distribution networks is still rarely available on a local scale: the Internal Gas Market Directive (IGMD) stipulates that DSOs must develop network decommissioning plans (“NDP”), but a survey of DSOs in Germany by VKU showed that “for 46 percent of municipal utilities and local energy suppliers, it is still unclear what will happen to their gas network”1. This is all the more striking as German operators should be ahead of others due to municipal “heating transition” plans (“Wärmeplanung”) being mandated by a 2023 law (for application by 2026 or 2028 depending on network size).
The questions of local methane consumption/production planning, accelerated amortization, right to disconnect consumers and the risk of spiraling unit tariffs will need to be solved in order to achieve a controlled transition.
For now, cases such as Mannheim’s DSO MVV (announcing in 2024 full decommissioning of the gas distribution network by 2035, then stating in 2025 that there could be no target date due to political uncertainty) illustrate the uncertainty that DSOs have to navigate.
E-CUBE has developed strong expertise on the topic of Gas Infrastructures through its recent projects and the experience of its consultants. We would be delighted to discuss these market perspectives and opportunities with you. Please feel free to contact the experts below to schedule a conversation on the topic.
