Home / Oil & Energy / General Energy News / EUROPE: GAS-Prices rise on Russian gas supply concerns, LNG tightening

EUROPE: GAS-Prices rise on Russian gas supply concerns, LNG tightening

British and Dutch wholesale gas prices rose on Friday morning on concerns about Russian gas supply, tightening of global liquefied natural gas (LNG) production and ahead of a Norwegian strike next week which could impact output.

In the UK market, the day-ahead contract was 4.00 pence higher at 160.00 pence per therm by 0833 GMT, while the weekend contract was up 10.00 pence at 165 p/therm.

The benchmark Dutch wholesale gas contract for August edged up by 0.10 euro to 148.10 euros per megawatt hour (MWh).

Traders said there are concerns in the market about a drop in flows through Nord Stream 1 being prolonged due to political negotiations over a turbine which was sent to Canada for repairs but its return is delayed due to sanctions.

Eyes will also be on scheduled maintenance during July 11-21 on the Nord Stream 1 pipeline to see if Russia reopens the pipeline on time.

The global LNG market is also tightening due to some prolonged outages.

“Besides prospects of even lower gas flows from Russia, Europe is also encountering increasing competition for LNG against Asian markets with soaring demand,” said Vladimir Petrov, analyst at Rystad Energy.

The second-biggest U.S. liquefied natural gas export facility hit by fire earlier this month will not be allowed to repair or restart operations until it addresses risks to public safety, a pipeline regulator said on Thursday.

The blast and fire knocked out Freeport LNG’s 15 million tonnes per year (mtpa) Quintana plant and the firm said it aimed for a partial restart in September.

Shell also said this week LNG shipments from its Prelude floating facility off north-west Australia would be disrupted for at least two weeks due to work bans by unions fighting for better pay.

President Vladimir Putin has signed a decree to take charge of the Sakhalin-2 gas and oil project in Russia’s far east, indicating it is up to the Kremlin to decide whether foreign shareholders are to remain in the consortium.

Sakhalin-2 supplies about 4% of the world’s current LNG market.

Eastward flows of Russian gas via the Yamal-Europe pipeline to Poland from Germany fell on Friday morning in line with nominations or requests for gas, data from pipeline operator Gascade showed.

Industrial action planned at Equinor’s Gudrun and Oseberg offshore platforms from July 5 could cut Norwegian production by 4%, adding to bullish supply risk, Refinitiv analysts said.

In the European carbon market, the benchmark contract was 0.12 euro higher at 90.28 euros a tonne.
Source: Reuters (Reporting by Nina Chestney)

Recent Videos

Hellenic Shipping News Worldwide Online Daily Newspaper on Hellenic and International Shipping