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Europe is facing a tighter gas market as Norwegian field operators enter scheduled maintenance season.
Any unplanned extension of the maintenance period would cause an imbalance on gas markets on the continent and leas to price rises, Bloomberg reported.
“Europe is already struggling,” Florence Schmit, a European energy strategist at Rabobank, told the publication. “Any deviation to the planned maintenance season can cause significant fluctuations in gas availability and in turn market prices, especially this year.”
Norway supplies about 30% of Europe’s natural gas, becoming the biggest supplier after the halt of most Russian gas flows. Right now, there is a risk of a suspension in remaining flows passing through the Ukraine after the latter’s incursion into Russian territory, which would tighten supply even further.
Bloomberg points out that an extension to Norway’s gas field maintenance season would not be unusual due to the complexity of the work involved in those operations. “The repairs involve careful balancing of pipeline pressure, while the complexity of the facilities and the North Sea’s harsh environment means it’s not unusual for additional work to be discovered,” Bloomberg explained.
“You will always see a shift from what was planned; something will take longer or less time and that has ripple effects across the rest of the work,” a senior executive from Norway’s gas pipeline operator Gassco told Bloomberg.
Earlier this month, Saxo Bank’s head of commodity strategy, Ole Hansen, noted that the European Union’s gas inventories were at 86.7% full and the expected slowdown in filling rates due to Norway’s maintenance season should not really affect final targets before heating season. The EU has a target of 90% full gas storage before winter begins.
“However, any major disruption in the coming months would heighten the need for alternative supplies, primarily via LNG, driving up prices as Europe competes with Asia and South America,” Hansen added at the time.
