The European energy system is witnessing a significant transformation, with a shift from stable pipeline contracts to a reliance on liquefied natural gas (LNG) cargoes that can be redirected based on global circumstances, stated Cristian Signoretto, president of the organization representing the European gas sector, in an interview.
The conflict in Ukraine has driven the European Union (EU) to significantly cut down on Russian gas imports, leading to a focus on diversification. This void is largely being filled by American gas, with a growing LNG demand in Asia as coal is replaced by natural gas. This competition is expected to keep prices high — between 30 and 40 euros per megawatt/hour — until new liquefaction projects start commencing operations between 2027 and 2029.
“We only expect a return to pre-war levels, between 20 and 25 euros, post-2027,” added Signoretto, cautioning against disinvestment in the sector should the perception persist that European demand will collapse.
Eurogas criticizes the EU Commission’s projections, which foresee nearly a 50% drop in gas consumption by 2030, deeming them unrealistic. “In sectors like residential and industrial, gas replacement is not yet feasible. That’s something that needs acknowledgment,” he defended.
Despite a reduction in energy dependency, the new setup complicates supply security. The association thus supports long-term contracts with diverse suppliers, investment in storage, and the maintenance of thermal capacity as safeguards.
“We learned that we cannot rely on a single source, as was the case with Russia. Diversification is now a priority,” he emphasized, noting that Europe also imports gas from countries like Qatar.
According to Signoretto, the EU Commission’s estimates do not reflect the technical and economic realities of member states. “The forecast of a 150 billion cubic meters reduction — almost half the current consumption — is not plausible. Not for households, industry, or energy production,” he reinforced.
He highlights that replacing gas with other sources is slow and often impractical. “The idea of quickly electrifying everything is unrealistic and costly. Gas — especially low-carbon options like biomethane and hydrogen — will continue playing a strategic role until and beyond 2030,” he emphasized.
In the residential sector, the transition to heat pumps faces technical limitations, high costs, and building incompatibilities. “Millions of homes, similar to those in Italy, do not support this shift. Gas will remain necessary for years,” he stated.
In industry, consumption decreases mostly due to production relocation, not energy transition: “This is concerning, not a sign of climate success,” he warns.
The Eurogas president further cautions that overly optimistic forecasts might jeopardize investments and threaten future supply. “If we assume we will no longer require gas and then find the need arises, we may discover that no one has invested and no supply is available,” he remarked.
The association is engaging in discussions with the European Commission to revise models and calls for greater pragmatism: “This is not about abandoning climate goals but recognizing ground realities and planning accordingly.”
Finally, it advocates for a technologically neutral approach, suggesting a hybrid system where electrification is complemented by decarbonized molecules. “A fully electric system is less reliable. It’s preferable to decarbonize gas rather than attempting to electrify everything,” he concluded.
