Page 4 - Euroil Week 34 2019

EurOil COMMENTARY EurOil
Cheap LNG floods Europe
LNG imports into Europe are booming, buoyed by low spot prices and weak European demand, as more regasi cation capacity is built
EUROPE
WHAT:
LNG imports into Europe have tripled over the past 10 months.
WHY:
European buyers are bene ting from lower prices and weak spot demand in Asia.
WHAT NEXT:
New regasi cation capacity is being built in European countries including Germany.
EUROPE has experienced a surge of LNG imports in recent months, fuelled by growth in global LNG supply, low prices and weak spot demand in Asia. LNG imports into Europe are estimated to have tripled in the past 10 months, and traditional suppliers of pipeline gas into the region are losing market share as a result.
Natural gas prices in Europe fell to 10-year lows in July, contributing to the boom in LNG shipments. is has also led to storage tanks on the continent being lled ahead of the winter heating season, when traders are expects to seek to bene t from higher gas prices.
Gas Infrastructure Europe, a trade associ- ation, estimates that gas storage in the region was over 91% full on August 29, with the gure above 97% in Portugal, Denmark and the Czech Republic.
Traditionally, northwest Europe has led the continent in receiving LNG imports. But this summer, Spain is also receiving near-record levels of LNG amid a heatwave that has raised cooling demand while depleting the amount of water that is available for hydropower generation. Spain accounts for almost a third of European gas storage capacity and its volume of LNG imports is expected to keep growing. Spanish gas grid oper- ator Enagas said on August 27 that the country would import more LNG in September than
previously scheduled while October deliveries were also anticipated to be higher year on year.
Market share
Data from analytics rm Re nitiv reported last week showed that the share of LNG in gas sup- plied to Western and Central Europe grew to 14% between October 2018 and August 2019. e gure accounted for 5% of gas in the same period of 2017-18.
Meanwhile Norway’s Equinor and Russia’s Gazprom, the two largest suppliers of pipeline gas into Europe, saw their market share decline for the rst time in four years. is is despite the fact that Gazprom’s total exports to Europe rose amid increased demand, with the continent importing 9% more gas year on year between October 2018 and August 2019. Nonetheless, Gazprom’s market share fell by 1% to 32%, marking the rst drop since 2014-15. Equinor’s share fell to a multi-year low of 33%, from 38% previously.
A Re nitiv gas market analyst, Marina Tsy- gankova, was reported by Reuters as saying that most of the increased volumes of Russian gas went to countries that do not have direct access to LNG imports, such as Slovakia and the Czech Republic. is comes as European countries stockpile gas ahead of the gas transit
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w w w . N E W S B A S E . c o m Week 34 29•August•2019