Europe’s LNG balancing act

Posted: July 21, 2026

Last year, almost half of the European Union’s (E.U.) gas supply came from imported liquefied natural gas (LNG), tethering Europe’s energy security to global supply chains. When disruption in the Strait of Hormuz removed 19% of global LNG exports from the market in March this year, prices almost doubled. Now, Wood Mackenzie is predicting that Europe will head into autumn and winter with its lowest levels of stored gas in fifteen years.

Europe is the world’s biggest importer of LNG by mass. So how can the E.U. maintain energy security while reducing its exposure to global shocks?

How did Europe get here? The LNG infrastructure build out

Cooling natural gas to -161^oC turns it into a liquid state, LNG. The process reduces it to 1/600^th of its original volume, making it easier to transport and store. Import volumes are often constrained by regasification throughput at terminals and the ability to move gas on through pipelines.

Following Russia’s invasion of Ukraine, the E.U. sought to reduce its dependence on Russian gas by rapidly increasing its LNG imports. In the years following the energy crisis, Europe increased its LNG regasification capacity at record speed. Germany, which had no existing capacity to import LNG, built its first LNG terminal in less than 200 days.

E.U. import capacity grew by 76 billion cubic meters between 2021 and 2025, and additional capacity of 100 billion cubic meters is expected before 2030. Thirteen E.U. member states have LNG terminals, providing seasonal flexibility and ensuring supply security for the whole E.U.

While this helped solve the initial problem, the increased LNG capacity had the unintended consequence of increasing the E.U’s dependence on U.S. supplies. Imports of U.S. LNG tripled between 2021 and 2025. Alongside this dependence, the E.U. is fully prohibiting imports of all Russian gas by 2027. In Q1 of this year, 13% of European LNG imports still came from Russia.

The infrastructure buildout improved energy security in the short-term, but has also raised questions about long-term use and its apparent conflict with the E.U.’s longer-term decarbonization goals. The E.U. needs to diversify, not just its suppliers but beyond its reliance on foreign imported LNG, to ensure supply security and resilience.

“Europe’s shift from pipeline gas to LNG was meant to provide security of supply and diversification. Yet disruptions caused by the war in the Middle East and an overreliance on U.S. LNG show that Europe’s plan has failed on both counts,” Ana Maria Jaller-Makarewicz, lead energy analyst for Europe at the Institute for Energy Economics and Financial Analysis said in a press release.

Reducing reliance on imported gas

So how can Europe build an energy market that is more resilient to global disruptions?

The AccelerateEU strategy, launched in April this year, aims to reduce the E.U.’s dependence on volatile fossil fuel markets through five main strategies: increasing homegrown green energy, enabling closer collaboration between member states, strengthening the grid, financial measures to protect consumers, and boosting investment in the clean energy transition.

The continent also continues to work towards lowering gas demand, but it’s not a quick fix. In Europe, around 30% of homes still use gas to heat buildings and water. Europe has managed to reduce its gas consumption by about 16% since the crisis. This reduction came mainly from industry—much of it due to plant closures—and the electricity sector, which reduced its gas demand by 30% by increasing renewables utilization.

Some European countries are also seeing success by creating biomethane from biogas, which can be used as a direct substitute for natural gas. In 2024, Europe produced about 5 billion cubic meters of biomethane, but forecasts suggest production could increase to 30 billion cubic meters by 2030. Traditionally, biogas has been much more expensive than natural gas, but with volatile natural gas prices, it may start to be considered a better investment. In Denmark, a subsidy system led to a rapid increase in biogas plants being built in the last decade, which now supply 40% of the country's gas. By 2030, Denmark anticipates its gas consumption could be entirely homegrown and green.

Repurposing LNG infrastructure

As for the LNG terminals, the Council of European Energy Regulators (CEER) expects them to evolve to support the import of low-carbon fuels such as bio-LNG, synthetic methane, ammonia, and hydrogen derivatives. Terminals are in strategic locations, have existing infrastructure, and staff with technical expertise, so it makes sense to repurpose them and integrate low-carbon fuels to bridge the gap between the E.U.’s current energy needs and longer-term climate goals.

Pilot projects are exploring ways to repurpose the existing infrastructure. In Antwerp, following a feasibility study, a project is underway to create an open-access ammonia import hub at the LNG terminal. It will include facilities for cracking ammonia into hydrogen and subsequent hydrogen purification. The project is intended to create an interconnected cross-border hydrogen transport network. It’s one of several projects working to convert LNG import facilities into ammonia processors, paving the way for more European hydrogen. In Poland, an LNG regasification terminal is in the process of recertification to process BioLNG.

These projects demonstrate how Europe can turn its emergency LNG expansion into infrastructure that supports its energy transition goals. To build better energy resilience in the future, the E.U. needs to focus on expanding green energy and repurposing LNG import assets for low-carbon fuels. But for now, Europe’s careful balancing act remains.