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Flexibility central to LNG supply

LNG Industry,


European import flexibility remains central to global LNG supply, according to the latest analysis from PIRA Energy Group. In Europe, current length implies lower spot prices in the near future.

European import flexibility central to LNG supply

While a surge in new LNG supply starting in 2015 will be hard to miss, incremental supply availability up until that point will remain dependent European buyers' rejected contracted volumes. Two key markets are worth watching for the upcoming winter:

  1. UK – while not a major re-exporter, the UK market is important because it appears to have the most amount of seasonal swing in LNG buying.
  2. Spain – the Spanish market is the other key market to watch.

Lower spot prices ahead

The next 60 days offers the lowest gas demand period of the year. This year will be particularly low due to the further erosion of power sector gas demand in most countries other than the UK.

Normally during this period, storage injections would increase to cope with the gas not being consumed. This year spare storage capacity is extremely limited outside of France, as the European gas market enters Q3 with record high storage levels. PIRA has cut the injection forecast in Q3 to 203 million m3/d, which is more than 100 million m3/d lower than last year.


Adapted from press release by Katie Woodward

Read the article online at: https://www.lngindustry.com/liquid-natural-gas/09072014/european_import_flexibility_key_to_lng_supply_941/


 

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