British gas exports to mainland Europe this summer could halve amid high continental storage levels, thereby reducing the country’s LNG import demand, said TSO National Gas Transmission (NGT). Gas exports at the start of summer were very high but in recent weeks they’ve fallen sharply.
The drop in part is due to high storage levels across Europe, with facilities currently at 75% of capacity, compared with 56% a year ago, according to Gas Infrastructure Europe data. NGT estimate gas flows to the continent – in its summer outlook – at 5.5bcm, compared with 12.2bcm last summer.
As a result, LNG deliveries to the UK were also on the decline, imports of the chilled fuel have dropped off recently, following the trend of exports. The UK is currently forecast to import just 0.45m tonnes (0.61bcm) of LNG this month, compared with 1.92m tonnes in May and 2.12m tonnes in April, according to provisional estimates.
Other Drivers
But the drop in LNG imports and gas exports was not simply due to ample gas in storage, as UK-continental exports will be lower year on year due to the expansion of regasification capacity on the continent to reduce reliance on Russian gas, which increases competition for LNG cargoes.
Unplanned maintenance at the Dutch Eemshaven LNG import terminal in May and industrial action at France’s LNG terminals in March-April were also contributing factors to the UK’s high exports and LNG imports in the second quarter of 2023.
It is less likely there will be further industrial action [in France] but send-out at Germany’s Lubmin FSRU [floating storage and regasification unit] has been averaging around 20% of useable capacity since commissioning in January. The UK has been the “prime destination” for diverted cargoes helping to see gas prices fall c90% since the peaks of August 2022.
The UK can export gas to mainland Europe via the country’s Bacton BBL link with the Netherlands and the IUK interconnector with Belgium.
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