Norwegian piped gas exports to NW Europe rebound in October

Norway's pipeline gas exports to landed markets in Northwest Europe rebounded in October after having fallen sharply in September due to heavy maintenance, an analysis of S&P Global Commodity Insights data showed Nov. 6.

Deliveries amounted to 9.56 Bcm in October, up from just 6.4 Bcm in September and also 5% higher year on year, the data showed. Exports in October were also higher than the five-year average for the month of 9.38 Bcm.

Year-to-date exports remain strong with pipeline deliveries up 10% year on year to 93.2 Bcm in the January-October period.

This is also only just below deliveries in the first 10 months of 2022, when exports totaled 93.7 Bcm. According to the Norwegian Offshore Directorate, 2022 is currently seen as the peak year for gas output in Norway.

Norway is now the single biggest supply source of gas to the European market after Russian deliveries were sharply curtailed through 2022.

Norwegian operators maximized production and European exports to help offset lost Russian volumes and to make the most of high prices, which hit record highs in summer 2022.

Producers continue to look to ensure high output levels given ongoing strength in European gas prices. Platts, part of Commodity Insights, assessed the TTF month-ahead price on Nov. 5 at Eur40.37/MWh.

'Vulnerable' market

Equinor CFO Torgrim Reitan said current gas prices reflected the fact that gas markets remain in a "vulnerable" state despite high European gas storage stocks.

Speaking to analysts following the release of the company's Q3 results, Reitan said Asian LNG demand and the expiry of the Russia-Ukraine gas transit deal at the end of this year also remained key "moving parts" to watch.

Reitan noted that prices in Europe were around $13/MMBtu even though gas storages were well filled ahead of winter. "So, it clearly tells a story about a vulnerable situation in the gas markets," Reitan said.

The weather is also set to be a critical factor this winter following a mild 2023/24 season, Reitan said.

"A normal winter would leave the gas storages around 40% full in April compared to 60% this year," he said. "So that will have an impact on prices during the winter."