Page 9 - EurOil Week 28 2021

EurOil COMMENTARY EurOil

well as a complaint to the European Commission financing for Three Seas.
about possible violations of antitrust legislation. US President Joe Biden has in contrast shied
Overgas maintains 2,100 km of Bulgaria’s away from actively promoting the interests of
gas distribution network and supplies gas to US LNG exporters, amid growing antipathy
51 municipalities. It is the biggest independent towards the industry among voters. Never-
natural gas supplier and trader on the Bulgarian theless, Washington helped facilitate a prelim-
market. inary deal being reached in March this year
Linden said the deal aligned with the Three between ExxonMobil, US floating LNG oper-
Seas Initiative, established in 2015. Involving ator Excelerate Energy and Albania’s govern-
Bulgaria and 11 other EU states, the initiative ment on developing a regasification terminal
was set up largely to counter countries’ eco- in the Balkan country.
nomic reliance on Russia. A key focus is support
for gas infrastructure investments, with the cur- Greek hub plans
rent roster of projects it supports including a gas The completion of its gas link with Bulgaria will
link being built between Poland and Lithuania, help establish Greece as a key transit route and
planned LNG terminals in Croatia and Estonia, trading hub for natural gas. Since early 2020,
and the Ionic Adriatic Pipeline (IAP), slated to Greece has also been transiting gas from Azer-
run through the Balkans. baijan on route to Italy via the Southern Gas
While dressed as a regional development Corridor.
initiative, Three Seas is also implicitly aimed at Greece produces little gas of its own, relying
expanding the market for US gas in Europe. It primarily on supplies from Russia and Azer-
had strong backing from the Trump administra- baijan as well as LNG deliveries arriving at the
tion, which was more openly supportive of the Revithoussa regasification terminal near Athens.
US LNG industry. In February last year former In addition to IGB, the country’s hub role will be
US Secretary of State Mike Pompeo announced further bolstered by the possible construction of
that Washington would provide an extra $1bn in a new pipeline from Bulgaria to Serbia. ™

PERFORMANCE

EU gas demand surges in Q1

EUROPE EU gas consumption increased 7.6% year on swiftly and significantly influence European hub
year in the first quarter to 132bn cubic metres on prices, a phenomenon last seen in 2018,” EC said.
High Asian prices the back of the post-coronavirus (COVID-19) “Meanwhile, on the electricity market, figures
diverted LNG away economic recovery, the European Commission’s show that electricity consumption recovered
from Europe. quarterly gas market reports. to close to pre-pandemic levels, despite a wide
Gas-fired power generation rose by 3.4% to range of restrictions remaining on economic and
4.9 TWh, according to the report. Despite the social activity.”
growth in gas demand, the EU’s net gas imports Prices eased back in February, but picked up
fell 3% to 78.5 bcm, with suppliers resorting to again in March, together with the cost of other
storage volumes to cover the shortfall. EU gas energy commodities and carbon prices. Addi-
storage levels dropped 30% by the end of March tional demand in spring has further driven up
2021, which was 24% greater than the decline prices.
that occurred in the first three months of last Regarding imports, pipeline gas imports
year. from Algeria notably more than doubled
The report noted how the surge in demand in the first quarter, thanks to competitive
for gas in Asia as a result of unusually cold win- oil-indexed contracts and rising hub gas
ter early on in the year had a major impact on prices. The recently inaugurated Trans-Adri-
global LNG trade, causing a spike in European atic Pipeline (TAP) provided 1.2% of total
wholesale spot gas prices this year. High price gas imports.
premiums offered by Asian customers diverted LNG supplies to the continent slumped 29%
LNG supplies away from Europe. This led to the year on year, while gas traded volumes on the
price spike in Europe. European hubs fell 13% in the first quarter, and
“This impact serves as an illustration of TTF remained the most liquid hub in Europe,
the globalised nature of natural gas markets, pooling around three quarters of all European
and reminded Europe that Asian markets can gas trade.™

Week 28 15•July•2021 www. NEWSBASE .com P9