Page 11 - EurOil Week 05 2022

EurOil PIPELINES & TRANSPORT EurOil

European gas storage falls below

40% threshold

EUROPE VOLUMES in European gas storage facilities fell of gas shortages this winter, analysts still see the
to under 40% of capacity on January 28, with still low level of storage as a source of concern. For
But temperatures have two months to go until the likely end of the win- comparison, storage facilities were nearly 52%
been comparatively low, ter heating season. full this time last year.
LNG imports high and Data published by Gas Infrastructure Europe “Europe has been blessed with normally
wind speeds strong in (GIE) shows that utilisation of facilities in the EU windy and somewhat warm weather this Jan-
recent days. and the UK had shrunk to under 39% by January uary, but gas reserves are nonetheless quickly
31, down 0.4% percentage points day on day. falling from what are already record-low levels,”
Fortunately, temperatures have been rela- analysts at BCS Global Markets (GM) said in a
tively high and wind power generation strong research note on January 28.
this month, easing pressure on the natural gas BCS GM explains that reserves are falling
system, and this has kept wholesale gas prices because of the short-term nature of Gazprom’s
in check. The March delivery contract at the contract pricing, under which around half
Dutch TTF hub was down over 4% by afternoon of sales are based on either day-forward or
trading on January 31, trading at just under €88 month-forward hub prices.
($98.20) per MWh, after several windswept days “Presumably much of that is month-for-
that have led to a surge in wind power generation ward, and given average prices in December
across Europe. were $1,300 per 1,000 cubic metres but January
In Germany, as of 13:00 GMT on January spot prices have generally been between $800
31, wind farms accounted for 55% of available and $1,100 per 1,000 cubic metres, gas buyers’
electricity in the country, whereas natural gas preference for spot purchases or pulling gas from
contributed just above 5%. In the UK, wind storage is understandable,” the Moscow-based
occupied a one-third share, beating gas, which brokerage said. “We would expect exports
accounted for 31.5%. to pick up sharply on February 1 when those
While recent conditions have allayed fears month-forward prices are reset.”™

Equinor warns of further

Hammerfest LNG delay

NORWAY EQUINOR has warned of a further delay in the Haave said. “We are pleased with the good
restart of the Hammerfest LNG plant in Nor- co-operation we have with the Hammerfest
The delay will deprive way’s far north, dashing hopes that the terminal municipality, employee representatives, safety
Europe from supply at would help ease supply constraints in Europe at delegates and suppliers. Now it is all about com-
the tailend of winter. the tail-end of winter. pleting the job together.”
Hammerfest LNG had to be closed in Sep- The lengthy downtime at Hammerfest LNG
tember 2020 after a serious fire tore through the has deprived Europe of gas supply at a time
facility, requiring extensive repairs and recon- when the continent is struggling through an
struction. Equinor initially hoped to have the unprecedented energy crisis. Wholesale gas
4.2mn tonne per year (tpy) plant back up and prices have surged to record highs in recent
running by October last year, but later post- weeks, and storage facilities are now less than
poned the relaunch after mapping out the extent 40% full.
of the damage. Europe is now scouring for alternative gas
In a statement on January 31, the Norwegian supplies in the event that deliveries from Rus-
state producer said progress had been affected sia, the continent’s top supplier, are disrupted
by coronavirus (COVID-19) infections and the because of military action in Ukraine. Supply
efforts to contain them. At times, half of work- from Hammerfest LNG would have helped
ers had to be placed in quarantine and isola- replenish storage facilities in April.
tion, plant manager Thor Johan Haave said. As The delay will result in Norwegian gas sup-
a result, the restart date has been pushed back ply trialling projections during spring. It has
from March 31 until May 17, 2022. beaten forecasts in the last few months, reaching
“The project work is nearing completion and 353.1mn cubic metres per day in December, or
we’re doing what we can to finish the project,” 5.7% above the level projected. ™

Week 05 03•February•2022 www. NEWSBASE .com P11