Page 13 - FSUOGM Week 37

FSUOGM PIPELINES & TRANSPORT FSUOGM

European LNG imports falter

EUROPE EUROPEAN LNG imports on a year-to-date underground storage sites currently at 93% of
basis in 2020 are now lower than they were in capacity.
A recovery could be the corresponding period of 2019, Russia’s Kom- As a result, year-to-date LNG supplies to
due in the remaining mersant reported on September 14, citing data Europe began to lag behind the corresponding
months of the year, from LNG terminal operators. Europe received level in 2019 for the first time in September,
however. some 64.2bn cubic metres of regasified LNG Kommersant reported. However, shipments
between January 1 and September 12, the news- could pick up again as demand recovers with the
paper said, marking a 3.9% decline year on year. onset of winter. Suppliers will be encouraged by
The continent’s imports of super-cooled gas rising prices, with gas spot cargoes at the Dutch
reached an all-time record of 76mn tonnes, or 99 TTF hub selling for $135 per 1,000 cubic metres
bcm in regasified volumes in 2019. This growth in September 1-14, or 46% more than in August.
was driven by rising global LNG supply, low A recovery in LNG volumes will cause prob-
prices and weak spot demand in Asia. The trend lems for Russia’s Gazprom, Europe’s biggest gas
continued into the first months of 2020, espe- supplier. Gazprom had been banking on strong
cially after coronavirus (COVID-19) lockdowns sales in the fourth quarter to make up for sharp
were imposed in China in late January, causing declines earlier on in the year.
its gas imports to plunge. Gazprom currently expects to deliver 170
However, demand slumped across Europe bcm of gas to Europe in 2020, down from just
after it began introducing its own coronavirus under 200 bcm a year earlier. The company has
restrictions in March. US exporters also sharply been hit harder by the impact of the pandemic
reduced their output over the summer, as some on gas demand so far this year than its LNG
gas had nowhere to go. Liquefaction plants in the competitors, as the bulk of its supplies are sold
Gulf of Mexico area were also closed ahead of under contracts that are oil-indexed with a time
Hurricane Laura in late August. lag. But these contracts will begin to reflect the
Making matters worse, Europe is contending oil price collapse over March and April in the
with record high levels of gas in storage, with latter months of this year. ™

Week 37 16•September•2020 www. NEWSBASE .com P13