EU Countries Are Storing Up Gas For Winter
European gas storages are filled at a record 96%, Les Echos reported citing consulting agency Cedigaz. Throughout this year, European companies have been actively purchasing both pipeline gas and LNG. Moreover, the import of liquefied gas to Europe for 10 months of 2019 increased by 80%.
In Great Britain, the Netherlands and Greece, gas imports more than tripled, while in France, Italy and Spain it grew by 50-75%. In October, the GIE monitoring association announced that reserves in European gas storages were at unprecedented 100.18 billion m3 of gas.
Purchases of large volumes of gas stimulated record low prices for the fuel this year. For the second year in the world gas market, supply has outstripped demand, which is pushing prices down. The situation was aggravated by the deterioration in the growth dynamics of LNG imports to Asia, the main region of its consumption. It was expected that China alone would increase LNG purchases by at least 30% (in 2018 they grew by 40% compared to 2017). But over the past 10 months, LNG deliveries to this country have increased by only 14%. A decrease in demand for LNG was recorded in America and the Middle East.
These factors coincided with an increase in shale gas production in the United States and the commissioning of new gas liquefaction facilities, including in Russia. Lower LNG consumption growth also triggered a collapse in prices for liquefied natural gas in the spot market. In some cases, LNG has become cheaper. First of all, this affected the American product, which this year in large volumes went to Europe at bargain prices.