Capstone believes the European Commission’s energy security strategy, REPowerEU, formulated in response to Russia’s invasion of Ukraine, will lead the European Union (EU) to replace at least 30% (50 billion cubic meters) of annual Russian gas imports (160 billion cubic meters) with liquefied natural gas (LNG) imports from other nations—such as the US—by September 2023. While the EU has the capacity to absorb this additional quantity, supply will be contingent on the ability of exporting countries to increase production and on the willingness of EU member states to sign long-term contract agreements.
We believe Enagás SA (ENG on the Madrid exchange) and Fluxys Belgium SA (FLUX on the Brussels exchange) are well-positioned to take on additional capacity.
How the EU Plans to Eliminate Russian Gas Imports by 2030
