Aurora’s gas system performance report provides a monthly snapshot of key operating characteristics for the European gas market. The key statistics include prices, volumes, trade, suppliers market share, indigenous production flexibility and storage provision for security of supply.
Highlights of our October 2018 report include:
- Gas prices: Prices fell for the first time since April, as a milder start to the Asian winter reduced Asian demand and enabled increased European imports of Asia-bound LNG cargoes. The approaching merger of French price zones on 1st November caused NW European price spreads relative to NBP to remain lower than year-on-year for the second month running.
- Consumption: Gross consumption across NW Europe was broadly unchanged year-on-year, with a 0.3 bcm decline in Germany and a 0.1 bcm decline in Netherlands being counteracted with a 0.4 bcm increase in British consumption. Swings in net consumption in GB and Germany of up to 3.2 bcm year-on-year were driven by non-power sectors.
- Supply: Russian pipeline supply increased by only 0.2 bcm month-on-month, marking the first time since July that Russian supply has increased by less than 1 bcm month-on-month. Increased LNG imports caused LNG to increase its share of European supply from 3% to 9% year-on-year.
- Indigenous production: With the start of the new gas year on 1st October (and thus a new Groningen production cap), Dutch production increased by 40% month-on-month, but was still down almost 30% year-on-year due to the cap being lowered to 19.4 bcm from 21.6 bcm. Despite increased financial activity in the North Sea, GB production was down 15% year-on-year.
- Pipeline imports: Total pipeline imports were only 1% higher year-on-year, with flows through Nord Stream and the Polish and Czech routes remaining largely unchanged, flows through the Austrian route increasing by 0.2 bcm and decreased unplanned outages on Norwegian gas fields allowing Norwegian flows to increase by 0.1 bcm year-on-year.
- LNG: Dutch, Belgian and French LNG imports increased above their respective 12 month averages, as lower Asian demand enabled procurement of Asia-bound LNG cargoes. This enabled both Belgium and France to import up to 0.2 bcm less gas year-on-year through German interconnectors, while Dutch LNG imports compensated the almost 1 bcm year-on-year decline in indigenous production.
- Storage: Minimal storage withdrawals as winter began, meant that storage inventory levels returned to levels above the trailing 5 year minimum. However, there remain vast differences across countries, e.g. inventories in GB and Belgium remained below 10 days of demand at the end of October, whilst French, German and Dutch storages had at least 40 days of demand.
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