Equinor Warns Europe of LNG Supply Strain Amid Asia Competition

Equinor ASA EQNR, the Norwegian energy major, has warned that Europe will need to offer competitive prices to attract sufficient liquefied natural gas (LNG) supplies to refill its depleted storage levels ahead of the next winter season. Per a Reuters report, Peder Bjorland, a senior executive at EQNR, said that about 30 billion cubic meters (bcm) of additional LNG (equivalent to 250-300 cargoes) will be needed to restore Europe’s gas inventories, which were left empty by two-thirds following the winter.

Speaking on the sidelines of the Flame gas and LNG conference in Amsterdam on May 14, Bjorland stressed the critical role of pricing. “Price is the most important thing in this game,” he noted, adding that European buyers will have to outbid competitors like China and other Asian markets to secure the required cargoes.

China, the world’s largest LNG importer, is rebounding after a recent slump in demand. During the U.S.-China tariff standoff, Chinese firms had been rerouting U.S. LNG to Europe. However, a recent trade truce between Washington and Beijing may reduce the resale of these cargoes to Europe, further tightening the global LNG market.

Bjorland also highlighted the importance of storage targets and weather conditions. He warned that a cold winter could expose Europe to vulnerabilities if gas storage isn't at least 85% full by the start of the season. The European Parliament recently moved to relax storage refill targets, citing concerns over price inflation, but Bjorland's comments suggest that lower targets may increase energy security risks.

Looking ahead, EQNR views Asia, particularly India, China and Southeast Asia, as the strongest region for future LNG demand growth. The company is strategically prioritizing LNG as it expands production to meet rising regional needs.

Amid growing LNG competition and uncertain weather conditions, EQNR emphasizes that Europe must stay proactive on pricing to safeguard its energy security and avoid potential shortfalls.

EQNR’s Zacks Rank & Key Picks

EQNR currently carries a Zacks Rank #3 (Hold).

Investors interested in the energy sector may look at some better-ranked stocks like Diversified Energy Company plc DEC, Comstock Resources, Inc. CRK and RPC Inc. RES, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Diversified Energy Company is an independent oil and natural gas producer in the United States. The company is primarily engaged in the production, transportation, and marketing of natural gas and natural gas liquids. The rising demand for natural gas as a cleaner-burning fuel and an uptick in the commodity’s prices are expected to positively impact DEC’s bottom line.

Comstock Resources is a leading independent natural gas producer with core operations in the Haynesville and Bossier shale formations of North Louisiana and East Texas. The company benefits from direct access to Gulf Coast markets and the LNG corridor. It maintains one of the industry’s lowest operating cost structures and has significantly reduced its leverage. With over 1,600 high-return drilling locations offering more than 25 years of inventory, strong free cash flow supports Comstock’s growing financial strength.

RPC generates strong and stable revenues through a diverse range of oilfield services, including pressure pumping, coiled tubing and rental tools. The company is strongly committed to returning value to shareholders through consistent dividends and share buybacks. RPC’s current dividend yield is higher than that of the composite stocks in the industry. Its new Tier IV dual-fuel fleet has boosted profits, with plans to further expand high-efficiency equipment to enhance operational capabilities. 

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