Med LNG imports hit nine-month high amid seasonal pull, lower renewables

Imports of LNG into the West and East Mediterranean regions reached a nine-month high in November, according to data from S&P Global Commodity Insights. Spain and Turkey led this increase, driven by seasonal factors and lower renewables.

Total LNG imports into the West and East Mediterranean, including Spain, Portugal, South of France, Italy, Turkey, Greece, and Croatia, stood at 4.23 million mt, or 68 cargoes, for November, according to data from Commodity Insights.

This figure market the highest monthly imports of LNG since February, when imports reached 5.1 million mt.

In November, imports also rose from the 3.34 million mt, or 58 cargoes, in October and compared with the 4.58 million mt, or 74 cargoes, in November 2023, the data showed.

Of the total LNG imported by the West and East Med in 2024 so far, the largest chunk arrived from the US at around 44%, the data showed. This was followed by 21% from Algeria and 13% from Qatar. Notably, 10% arrived from Russia and 6% from Nigeria.

Spain, Turkey bolster Med imports

Given the lower renewables supply and colder temperatures across the Mediterranean, both gas to power and residential and commercial demand saw sharp upticks last month, supporting demand.

Of the total 4.23 million mt imported into the Mediterranean in November, the largest increases were seen from Spain and Turkey. Monthly imports in the West and East Med rose nearly 27% month on month in November.

Notably, Spanish imports of LNF rose 28% from 950,000 mt in October to 1.22 million mt in November, while Turkish imports jumped nearly 229% from 280,000 mt to 920,000 mt.

"The market is on edge right now, though; nobody wants to be caught short but no one wants to pay up either," an LNG trader said. "There was a squeeze in Greece, the East Med was a lot tighter than expected because of the low renewables, hydro and nuclear weren't making up for it. The pipeline supply couldn't meet the jump in demand, so they needed more LNG."

The reduced wind and solar generation supported gas and LNG demand. With demand outpacing pipeline supply, more LNG was lured into the West and East Med to satiate demand requirements.

As a result, this supported prices in both hubs with Platts, part of Commodity Insights, assessing the DES Mediterranean marker for January at $14.360/MMBtu on Dec. 4, which was at parity to the Northwest European marker.

At the same time, Platts assessed the DES East Mediterranean marker for January at $14.530/MMBtu on Dec. 4,this was a 17-cent/MMBtu premium versus Northwest Europe.

"It is a mixed picture, though; some are more bullish than others in winter," the trader added. "It feels like it is a bit quiet at the moment, the calm before the storm as everyone is just waiting ... Some think the [Russia-Ukraine] pipeline will continue, others think it will stop. The impact will be on the Balkans, Greece can export to Bulgaria, but will it be enough? No one is sure."

The uptick also supported domestic gas prices which further attracted LNG inflows. Platts assessed the respective month-ahead contracts at the Italian PSV and Spanish PVB natural gas hubs at Eur48.415/MWh and Eur47.095/MWh, respectively.

In Italy, available capacity for LNG imports rose late in November with the return of the OLT Toscana Offshore FSRU on Nov. 26. This was after the asset completed a lengthy nine-month maintenance period that saw its sendout reduced to zero.

While LNG imports rose month on month across both Mediterranean countries, each also relied extensively on significant storage withdrawals to address sharp upticks in gas-fired power demand over November.

To address the 36% yearly rise in CCGT demand, Spain also had to rely on storage withdrawals, as underground inventories dropped from being 100.22% full on Nov. 1 to 93.25% on the last day of the month, data from Gas Infrastructure Europe showed.

Similarly, Commodity Insights data showed Italian gas-for-power consumption soaring 39% higher than in 2023 to reach 1.48 Bcm in November, as net withdrawals over the month totaled just over 1.5 Bcm.

Pulls from France via the Pirineos IP also rose as Spain's net imports amounted to 44 million cu m in November, data from Commodity Insights showed. A year earlier, the country was a net exporter of gas to France over the same period, by an order of 312 million cu m.

LNG tanks dropped slightly at the end of the month to be 61% full by Nov. 30, compared with 65% on Nov. 1, Spain's Enagas data showed, with the tanks at Barcelona and Sagunto being 92% and 92% full, respectively.

A year earlier, however, the tanks' filling levels increased over the same period from being 69% full Nov. 1 2023, to 77% Nov. 30, 2023.