European insurers urged to cease underwriting LNG terminals

Written by Adam Cadle

11/03/2021

Leading European insurers are being urged to cease underwriting gas and liquefied natural gas (LNG) terminals in order to be in line with a 1.5°C pathway.

In a report published by Urgewald, the likes of Allianz, Generali, Munic Re and Talanx are highlighted as supporting construction and operation of the LNG terminals Świnoujście, Zeebrugge and Dunkirk.

LNG is gas that has been cooled down to -162°C to form a liquid that can be more easily and safely transported over bodies of water in LNG tankers, or over ground in LNG trains. It is made up of fossil gas that is predominantly methane (75-99%). LNG is imported and exported via LNG terminals at either end that have liquefaction facilities at the export side, and regasification facilities at the import side so that it can be turned back into a gas form and funnelled into the local gas grid.

“Europe currently has 28 large-scale LNG import terminals and 6 small-scale import terminals. These terminals are in a state of chronic under-utilisation, running regasification facilities at a fraction of their capacity at an average of 25% since 2012. Despite that under-utilisation, more are currently planned. As of 2019, 21 new LNG facilities were planned and 6 were already under construction. If Europe wants to stand a chance of meeting emissions reduction targets, these terminals must never be built,” Urgewald said.

“The EU has set clear targets for CO2 reductions. This will exacerbate already falling demand for gas. In 2020, it fell by 7%, following an average reduction of 5% year on year in the proceeding few years. Any new investments in LNG infrastructure would not be following the market but rehashing tired models of fossil fuel dependency that the global society can no longer afford.”

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