EUROPE GAS-Prices decline after Norwegian LNG plant leak stopped
British and Dutch wholesale gas prices declined on Thursday morning after a leak at a Norwegian liquefied natural gas (LNG) plant was stopped.
The benchmark Dutch front-month contract TRNLTTFMc1 down 1.70 euros at 24.90 euros per megawatt hour (MWh), while the Q4 price TRNLTTFQc2 declined by 0.55 euro to 39.20 euros/MWh, according to Refinitiv Eikon data.
The British within-day contract TRGBNBPWKD was 3.00 pence lower at 62.00 p/therm, and the day-ahead contract TRGBNBPD1 was down 3.40 pence at 60.00 p/therm.
A gas leak at Norway’s Hammerfest liquefied natural gas (LNG) plant has been stopped and normalisation is underway but it is too soon to say when production will resume, operator Equinor said.
Europe’s only large-scale LNG plant, at Melkoeya island just outside the Arctic town of Hammerfest, can process 18.4 million cubic metres (mcm) of gas per day when fully operational, just over 5% of Norway’s gas export capacity.
“The news of the unplanned outage at the Hammerfest LNG plant fuelled volatility, pulling (Dutch gas) for July prices to a 5-day high, before they weakened by the close,” said analysts at Engie EnergyScan.
“Prices are weakening again this morning, probably pressured by the news that the gas leak has been stopped overnight. However, the 20-day low (24.59 euros/MWh) or the 5-day average (25.15 euros/MWh) levels could lend support, while a new push towards the 5-day high (27.87 euros/MWh) cannot be ruled out,” they added.
There are ongoing maintenance outages in Norway until mid-June NSEA/AM but high storage levels and muted demand are also putting downward pressure on prices, traders said.
The latest average weather forecasts for Britain and north-west Euripe are in line with the previous ones, with slightly warmer temperatures expected from June 9-14, Refinitiv Eikon data showed.
Meanwhile, wind speeds are forecast to decrease by the enf of the week in Britain and Germany, which could raise demand for gas from power stations.
In the European carbon market, the benchmark contract CFI2Zc1 was down 1.17 euro at 79.85 euros a tonne.
Source: Reuters (Reporting by Nina Chestney)