UK LNG imports fall in May as rising gas stocks fill low storage capacity

UK LNG imports in May fell by more than 40% on the month as inventories rose amid high storage levels in the low capacity country, ship tracking data from S&P Global Commodity Insights showed.

The UK imported almost 1.5 million mt of LNG in May, down from around 2.3 million mt in April, according to the data. Over 84% of imported LNG in May arrived from the US and Qatar, making up around 38% and 46% of that volume respectively. Comparatively, the US accounted for around 42% of LNG imports and Qatar around 31% in April.

Compared with the Continent, the UK has low gas storage capacity and LNG imports have fallen alongside rising inventories. Gas Infrastructure Europe data shows UK gas storage levels at above 91%.

The UK can store nearly 9.7 TWh, according to GIE, around 1% of the country's annual demand -- significantly lower than other major European economies. For example, Germany, Italy and France can store 25%-35% of their annual demand.

Despite rising inventories, the UK has available regasification capacity and good pipeline connectivity to Europe. UK gas interconnectors to Belgium and the Netherlands were maximized in May and April, according to S&P Global data.

The ZEE/NBP day-ahead basis stood at an average of 99.499 pence/therm in the positive in May, according S&P Global data, with the ZTP equivalent having averaged a discount of Eur9.570/MWh compared with the TTF equivalent. As a result of the available arbitrage opportunities last month, flows of natural gas into Belgium from the UK via the Interconnector pipeline came in at 1.710 Bcm, close to full capacity given the large price spread between the NBP and ZEE gas hubs.

In May, the monthly average price for LNG delivered into Northwest Europe was $22.94/MMBtu, down over 26% from $31.24/MMBtu in the previous month.