Spain gas intake up 12% in May on robust US, Nigeria, Russia volumes

Spanish natural gas intake in May increased 12% year on year to 36.7 TWh as robust LNG imports from US, Nigeria and Russia ousted pipeline imports from Algeria, which fell to a post-pandemic monthly low, according to data published June 9 by gas grid operator Enagas.

Volumes received from the US in May totaled 13.1 TWh, maintaining its position as principal supplier, with 35% of all volume supplied to Spain in the year to date, or 67.5 TWh.

Volumes from Nigeria more than doubled year on year to 4.9 TWh, while Russian volumes rose 52% to 3.3 TWh. The two countries have supplied 15% and 7%, respectively, of Spain's gas volume in the year to date.

Platts DES MED marker for H2 June LNG delivery was assessed June 9 at $23.589/MMBtu, up from $19.723/Mmbtu the previous day following news of the outage at Freeport LNG, according to S&P Global Commodity Insights data.

Increased LNG flows continued to displace Algerian piped gas from Spain's supply matrix, with volumes through the 11 Bcm/year Medgaz pipeline seen at around two thirds of capacity in May, according to Enagas data.

Algerian volumes stood at 7 TWh in May, the lowest monthly volume since pandemic-related travel restrictions in 2020 and comes amid a political issue between the two countries.

On June 8 Algeria announced it was suspending a 20-year treaty of friendship with Spain due to the latter's stance on the Western Sahara.

Spain's largest gas importer Naturgy is in regular contract negotiations with Sonatrach, which holds a 4% stake in Naturgy. The 8.4 Bcm contract through to 2030 between the two should not be affected, Spanish financial daily Cinco Dias reported June 10, citing company sources.

The company did not comment when contacted June 10.

Re-export record

Internally, Spain saw gas demand in May drop 13% year on year to 26.9 TWh as demand from industry fell 15%, led by a 36% drop in the refining sector.

This meant the excess volume was largely exported, with 7.8 TWh re-exported from Spain for a second consecutive month, including a record net 5.8 TWh exported to France via pipeline, with the Spain-France link running at around 85% of capacity.

The Spanish PVB price for day-ahead and month-ahead was assessed July 9 at Eur79.00/MWh for both contracts, with the French PEG at a Eur2.60/MWh premium for day-ahead and a Eur2.65/MWh premium for July, according to S&P Global data.

Besides French exports, LNG reload volumes totaled 1.5 TWh in May, up 29% year on year, while storage injections into underground sites amounted to 1.6 TWh, taking stocks to around 66% at the end of the month, with a further 500 GWh already added so far in June, according to latest Enagas data.