As internal violence continues to destabilize Libya, deliveries of pipeline gas to European markets from that North African nation have ceased altogether.
The civil conflict has prevented approximately 468 MCM (16.5 billion cubic feet) of natural gas deliveries to the Italian market since February 23, 2011. Since the cutoff, deliveries of gas from Russia have jumped 6 MCM per day (0.2 Bcf/d) and storage withdrawals have risen 89% compared to withdrawal rates two weeks prior to the Libyan delivery shut-down.
“Global natural gas markets are becoming so well connected that a production shut-in in North Africa allows producers from other regions to take Libyan market share in Europe,” said BENTEK Vice President and General Manager Jim Simpson. He added, “North African curtailments to Europe is one more reason the U.S. will not see higher LNG imports and the U.S. LNG import market should drop to zero for the foreseeable future. The recent catastrophic earthquake in Japan has put some upward pressure on the global LNG prices, which is another reason why LNG shippers will be looking to markets other than the U.S.”