NWE April LNG imports decline on year; UK arrivals sharply lower

Northwest European LNG imports in April dropped year on year as other premium markets vacuumed cargoes away from the region, leaving supply tight in shoulder season.

LNG imports into Northwest Europe -- France, Belgium, the Netherlands, Germany and the UK -- totaled 5.21 million mt in April, down 27.6% year on year, but up 7% month on month, according to S&P Global Commodity Insights data May 3.

France continued to hold the top spot in terms of destination markets for the third consecutive month, accounting for 40% of the total imports, followed by the Netherlands (30%) and Belgium (13%).

On the supply side, the US accounted for 57% of total imports into Northwest Europe, followed by Russia (17%) and Algeria (11%).

The year-on-year decline was spearheaded by the UK and Belgium, down 83% and 37% respectively, while other countries saw an average growth of 6.3%.

The region has been clouded by low demand, with higher-than-average gas inventory levels adding to the bearishness. Moreover, over April the region also had to compete with demand from Asia and other atypical demand regions like Egypt and Latin America, which swung cargoes away from Northwest Europe.

"It seems that all of Europe is short," an Atlantic-based trader said.

Dutch imports highest since 2012

Netherlands imported 1.55 million mt LNG in April, making it the strongest April for the country since 2012. These levels were rangebound year on year but up 37% month on month.

The robustness of imports into Netherlands comes on account of the competitiveness that the gas hub has displayed versus other premium markets in Europe, such as Italy and the Baltics.

"Netherlands can compete with the other premium markets like Italy, Finland or Poland," a trader said. "But other gas hubs are priced out, even France and Spain."

The region was particularly well supported in the second half of April when colder temperatures pushed the EU into net withdrawals and enabled the Netherlands to attract more cargoes.

"[The Netherlands] didn't receive gas from [the Norwegian Continental Shelf] for five days, which coincided with the cold snap in the market, so the TTF reacted and pulled cargoes into the region and reduced pipeline exports to other markets," David Lewis, LNG analyst at S&P Global said.

UK April imports hit 16-year low

The UK imported 392,000 mt of LNG in April, the lowest level recorded for April since 2008, when imports amounted to 56,000 mt. Imports were down 82% year on year and 22% month on month.

The low appetite of LNG into UK is a result of the weakness in the gas hub, making it uneconomical for the country to rely on LNG.

"For some companies the last actual import into the UK was last October," the second trader said. "The NBP/TTF spread kept dropping and there was no demand, so all the cargoes are diverted away."

The variable cost in the UK is also relatively higher, the trader said.

The low imports into the UK could be here to stay while providing more leeway to other areas of Northwest Europe, according to S&P Global analysts.

Exports from the UK along the IUK and BBL pipeline dropped 90% year on year to 3.4 MMcm/d in the first four months of 2024, Lewis said. "France has overtaken the UK to become the preferred destination for LNG to enter the western Europe network," he said. "The tighter global LNG market combined with expanded regasification capacity on the continent has reduced the role of the UK and could impact LNG demand into the UK throughout the summer months."

Rest of Northwest Europe

Belgian imports in April also dropped sharply, falling 28% month on month and 37% year on year to 694,000 mt.

"Belgium also has very low demand because ZTP doesn't make sense," the second trader said.

The May 26 regasification slot at Zeebrugge, which was originally supposed to be auctioned on March 13, is still unauctioned, indicating low demand in the region.

"the initial slot fee is already around Eur600,000, and then you have to discount the rest of the variable cost and ZTP, you already lose money," the second trader said.

Platts, part of S&P Global Commodity Insights, assessed DES Northwest Europe Marker for June at $9.428/MMBtu on May 2, or at a discount of 25 cents/MMBtu to the June TTF hub futures price.