ANN/THE STAR – Europe’s natural gas market is likely to remain tight this year as governments scramble to refill storage amid a dearth of Russian supply, Norway’s largest energy company said.
Equinor ASA’s warning comes despite a recent slide in prices – down 50 per cent in a month as an unusually warm winter damps demand.
Europe’s storage sites are 83 per cent full, far above the seasonal norm, yet the region remains exposed to any further supply disruptions and vies with Asia for flows of liquefied natural gas (LNG).
“The gas stores are pretty full and it’s warm weather, and that affects the gas price, but these stores need to be filled up this year with less Russian gas available,” Equinor CEO Anders Opedal said in an interview. “We are likely to see a market where gas prices are swinging quite a lot.”
Benchmark gas futures rose as much as 5.7 per cent on Thursday, clawing back some of Wednesday’s 10-per-cent loss.
The volatility underscores traders’ concern that Europe is fundamentally short of gas for the next few years, with no major new LNG export projects starting globally in the near term.
Norway has become the region’s biggest gas supplier after Russia’s shipments slumped in the wake of the situation in Ukraine.
The Norwegian government said flows this year will be little changed from 2022, when the country exported 122 billion cubic metres of the fuel. Production levels are likely to stay the same for the next four to five years, it said in a statement.
Despite elevated demand for Norwegian gas, Equinor doesn’t intend to defer planned field maintenance, according to Opedal.
“On an annual basis, we kept to our maintenance schedule and we will continue to do that in 2024 and 2025, because security of supply comes first,” he said.
“If we don’t keep to our maintenance schedule, we may end up with a stoppage in gas deliveries to Europe and that isn’t what anyone wants.”