The Future of LNG Terminals in Europe

Under this trajectory, fossil gas consumption is expected to fall dramatically, and already, the markets are seeing early signs of this shift. Between 2021 and 2024, gas consumption in the EU fell by an estimate 19 percent, driven by electrification, renewables deployment and demand reduction policies. Other European countries observed a similar trend. The gas demand in the UK market continues to decline, and the UK’s LNG terminals have also seen a reduction in active use with the rise in renewable power generation and the reduction in demand from the continent due to the new import capacity in Northwest Europe.

This decline has begun to impact LNG infrastructure utilisation. There is a genuine risk of overcapacity, as a potential drop in demand coincides with the commissioning and expansion of terminals aimed at enhancing short-term energy security. The Institute for Energy Economics and Financial Analysis (IEEFA) forecasts that Europe’s 2030 regasification capacity will be more than three times higher than its 2030 LNG demand. Although the utilisation rate of some terminals is high, this very much depends on aspects such as seasonality and location. For instance, in 2024, the average utilisation of LNG terminals in the EU was just 42%, down from 58% the year before. This threatens the commercial viability of these facilities, which means that terminals must evolve or risk becoming stranded assets.

A final element to consider is that Financing institutions like the European Investment Bank now require that new infrastructure be hydrogen-ready or demonstrate alignment with EU decarbonisation targets to qualify for funding.[5] Long-term permitting, subsidies, and strategic planning are increasingly tied to future-proofing.

To address these challenges, terminals, not only LNG regasification but fuel terminals in general, need to be reimagined to support a green energy vectors. The objective is not to abandon LNG regasification terminals but to make them suitable for multi-molecule energy hubs, capable of handling alternative fuels like hydrogen, ammonia, bio-LNG, synthetic methane and, to what is becoming a hot topic in Europe, CO2.

Hydrogen

Hydrogen has been highlighted as a central piece to the EU’s decarbonisation plans. The goal is to produce and import tens of millions of tons of renewable hydrogen by 2030 to decarbonise hard-to-abate sectors. Hydrogen can be liquefied and shipped in a manner similar to LNG. But in practice, the challenges are enormous and the technology maturity at significant scale is low, and the per MW cost significantly higher than natural gas.

Hydrogen has a boiling point of –253°C, almost 100°C colder than LNG and below the boiling point of oxygen and nitrogen. To handle liquid hydrogen, terminals would need entirely new cryogenic tanks, compressors, and pipelines made from materials that can withstand embrittlement and leakage risks and are vacuum insulated. Therefore, hydrogen suitability needs to be baked into the initial design and existing equipment cannot typically be converted.

Ammonia

The volumetric energy density of liquid hydrogen is about a third that of LNG, making it less efficient to transport in bulk. Because of this and other challenges, many developers are turning to ammonia as a hydrogen carrier, to either use ammonia directly as fuel or crack it back into hydrogen.

Ammonia can be liquefied at –33°C, which is technically much easier to manage. It is already traded globally in large volumes, and the infrastructure for storage and shipping is relatively mature at a smaller scale. Yet adapting LNG terminals for ammonia is not trivial. Ammonia is toxic, corrosive, and requires entirely separate unloading arms, storage tanks, and vaporisation systems. Still, terminals in Brunsbüttel in Germany, the Port of Rotterdam[3] in the Netherlands, and Bilbao in Spain are already planning ammonia reception and storage capabilities. These facilities will be equipped with ammonia-compatible tanks, leak detection systems, safety enhancements, and, in some cases, ammonia crackers that can convert it back into hydrogen at or near the point of use.

Methanol

There is an expectation of a growing market for methanol, as it is now seeing not only as a chemical feedstock but as a potential alternative green marine fuel, when derived from renewable or low-carbon sources.

The integration to existing LNG terminals introduces some challenges. Methanol has different handling requirements than LNG, including ambient storage and safety systems because of its toxicity and flammability. The economic case may also be uncertain, given the evolving regulatory landscape and fluctuating methanol demand. Despite these hurdles, successful integration could position LNG terminals as central nodes in a diversified, low-carbon energy network.

Carbon Dioxide

A promising application involves leveraging LNG cold energy during regasification to support CO2 liquefaction and export infrastructure. When LNG is warmed from -162°C to ambient temperature, it releases enormous quantities of ‘cold energy’, which is often wasted. However, liquefaction of captured CO2 for ship export requires chilling it. Substantial energy savings can be achieved by integrating these processes at LNG regasification terminals. This will reduce the terminal’s emissions and lower the levelized cost of CO2 handling. This integration aligns with Europe’s broader industrial decarbonisation strategy, particularly in industrial clusters where CO2 capture and storage is key.

Projects across Europe are already demonstrating this concept. In Dunkirk, for example, the CO2 export terminal being developed by Fluxys and Air Liquide is leveraging proximity to the Dunkirk LNG terminal to share cryogenic and port infrastructure. Similar initiatives are underway at Dragon LNG in Wales, Isle of Grain in England and the Rhône CO2 network in southern France. These projects illustrate how LNG terminals can evolve into multi-functional decarbonisation hubs, handling not just gas but also molecules and materials critical to the energy transition.

Bio / Synthetic LNG

Once treated and liquefied LNG from bio or synthetic sources is entirely compatible and interchangeable with LNG from natural gas sources and equipment for shipping and storage is the same, so existing equipment is completely usable, and source certificates mean blending with other sources is possible without losing the premium value. Some existing regasification terminals are already dealing in renewable sources of LNG.