Page 14 - GLNG Week 02 2023

GLNG EUROPE GLNG

Warm weather allows

Germany to refill gas tanks

in the middle of winter

STORAGE RECORD-HIGH December and January tem- time ever Russia reported a positive average
peratures have allowed Germany to inject more annual temperature for the year of +1C.
gas into its gas tanks to hit 90% full as of January The EU imported a total of 34.1bn cubic
6, from 87% a few weeks ago, in an unprece- metres of gas in October in 2021, of which a
dented result. third (33%) came from Russia and another third
Europe has scrambled to buy LNG sup- (36%, 12.2 bcm) from Norway. A year on and
plies mainly from the US and Qatar after it was the imports were down somewhat at 30 bcm, but
plunged into an energy crisis in 2022 after Russia Russia’s share had fallen to 2.3 bcm, or only 8%
cut supplies of piped gas to next to nothing in the of the total. Norway’s contribution has remained
second half of the year. the same at 12 bcm, but its share has increased
Europe’s average gas tank storage was 83% as slightly to 40%.
of January 6 and although Europe as a whole has But the really big change in the last year is
continued to receive new and record level sup- that LNG accounted for 19% in October 2021
plies of LNG, it had been withdrawing gas from (6.4 bcm), but that leaped to 38% (11.5 bcm) a
storage since November. (chart) year later after import volumes almost doubled.
After a brief cold snap in the first half of The low prices and full tanks will significantly
December where gas started to be withdrawn, reduce the pressure on Europe in the 2023/24
a 25C increase in temperatures over the holiday winter season as Russian deliveries of gas are
period has destroyed demand and new record- expected to halve this year, making it difficult to
high supplies have led to more gas being injected refill the tanks for the next heating season, which
into the tanks than has been withdrawn and the is due to begin in November.
overall level of gas in storage has remained flat Russia delivered 185 bcm of gas in 2021, but
at about 83%. that dropped to just over 100 bcm in 2022 and is
The combination of very full tanks and low anticipated to fall to about 50 bcm this year.
demand for gas for heating has driven down the The Kremlin needed a cold winter this year
prices on the Dutch TTF hub, which have fallen in the hope that Europe would burn through its
below the levels they were at before the start of reserves fast with few options to replenish them
the war in Ukraine on February 24. in 2023, thus perpetuating the energy crisis for
The front-month TTF contract closed at €55 another year. Instead, Europe will have to import
per 1,000 cubic metres on January 4 – its low- significantly less gas than last year thanks to the
est level since mid-February a year ago. Capital warm winter, making supplying itself with LNG
cities such as Berlin and Paris experienced tem- instead of Russian piped gas much easier.
peratures of between 15-20 degrees Celsius in There is still a chance that the temperatures
the first days of the new year – a time when they will turn cold again, as the heating season typ-
typically ensure temperatures closer to freezing. ically continues until the end of March, but the
Even Russia reported the second-warmest mild Christmas and New Year’s holidays signif-
winter on record and an average temperature of icantly increase Europe’s chances of avoiding a
only -1C for the whole of 2022. The only warmer new and even worse energy crisis in 2023.™
winter on record was in 2020, when for the first

P14 www. NEWSBASE .com Week 02 12•January•2023