Stifel Says North Sea Natural Gas Saves Billions of Pounds Compared to Imported LNG

Investing.com - Stifel estimates that compared to imported liquefied natural gas, North Sea natural gas production in the UK will save the country about £2.5 billion in 2025. The company expects that due to the rise in global liquefied natural gas prices caused by the Persian Gulf conflict, the savings in 2026 will increase significantly. In 2025, about 20% of the UK’s natural gas supply relies on liquefied natural gas imports.

The company states that North Sea natural gas in the UK is cheaper than imported liquefied natural gas and offers additional benefits that LNG imports cannot provide, including tax revenue, employment opportunities, investment, economic growth, and energy security. Stifel questions the UK’s policy of taxing domestic natural gas production through a “super profits tax” while planning to increase liquefied natural gas import capacity.

According to the Climate Change Committee’s forecast, the UK will need oil and natural gas until 2050 and beyond, as only about 25% of the UK’s natural gas is used for power generation. The UK government predicts that even if the 2030 clean energy targets are met, the country will still require about 35 GW of gas-fired power as backup for renewable energy after 2030.

Stifel recommends reforming the “super profits tax” and maximizing UK natural gas production to increase employment, tax revenue, reduce emissions, and improve energy security. The company describes the current situation as potentially the most severe energy crisis since 1973.

The company advocates for the UK to adopt a “comprehensive and synchronized” energy strategy and states that maximizing domestic natural gas production is the better option compared to all alternatives, which are worse for the country.

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