Norwegian pipeline gas flows to Europe have risen in recent days, partly offsetting slower LNG sendout, as European prompt prices jumped.
Aggregate Norwegian exports to Europe averaged 274.9mn m³/d between 1 August and this afternoon, up from 265.5mn m³/d on 26-31 July. Maintenance on Russian state-controlled Gazprom's 55bn m/yr Nord Stream pipeline had reconfigured flows across Europe on 14-25 July.
Deliveries were up to most markets, but the rise was largely driven by stronger flows to Emden and Dornum, where gas can enter the German markets or Dutch grid. Combined deliveries to the two points were up to 144mn m³/d from 138.8mn m³/d (see Norwegian deliveries graph).
A sharp rise in northwest European prompt prices may have encouraged deliveries to step up.
The average Dutch TTF everyday market rose to €6/MWh on 1-7 August from €4.66/MWh on 26-31 July, moving as high as €6.95/MWh today — its highest for any day since 15 April.
The brisk rise at the front of the curve outpaced gains further out, which may have driven quicker Norwegian sales. Daily Norwegian exports to Europe have been highly responsive to TTF everyday-summer 2021 spreads so far this summer. And the TTF everyday-summer 2021 spread averaged minus €5.725/MWh on 1-6 August, in from minus €6.48/MWh on 26-31 July. The differential held as tight as minus €5/MWh on 4 August, the narrowest for any day since 15 April (see TTF, NBP everyday-summer 2021 spreads graph).
In contrast to the rise in Norwegian receipts, Russian deliveries remained broadly unchanged from late last month, as physical deliveries to Slovakia through Ukraine dropped (see European supply graph).
A sharp increase in exports to Ukraine — driven by higher backhaul from Slovakia — left less gas arriving physically at the Ukrainian border. Most of the rise in eastward flows appeared to be fed with gas sent to Germany through the Yamal-Europe and Nord Stream pipelines. Deliveries to Mallnow climbed sharply from the start of the month, with receipts at the Polish border further upstream at Kondratki approaching the line's capacity.
Some of this gas arrived in the Czech Republic, with onward deliveries to Slovakia rising to 836 GWh/d on 1-6 August from 511.7 GWh/d on 26-31 July. And much of it was delivered on to Austria and Italy, partly as a result of maintenance on the Transitgas pipeline, which curbed Italy's northwest European receipts. The restrictions halted deliveries at Wallbach on 3-5 August, over which Baumgarten receipts climbed sharply (see Mallnow to Baumgarten flows graph).
Nominated Russian deliveries to Slovakia in transit through Ukraine remained broadly unchanged, although physical deliveries fell as shippers backhauled more gas to Ukraine at Velke Kapusany. Gazprom may have maximised its booked capacity through Ukraine, as well as physical capacity through Nord Stream and Yamal-Europe, and may have been unwilling to book additional capacity on a day-ahead basis in order to lift deliveries further (see Gazprom capacity graph).
In contrast, Norwegian deliveries to Emden and Dornum have moved well above combined booked firm and interruptible entry capacity at both points. Shippers have taken up capacity on a short-term basis at both points in order to lift their Norwegian take as prompt prices rose (see booked capacity vs flows graph).
Sendout slip centred elsewhere
Europe's aggregate LNG sendout slipped early this month, at least partly offsetting the rise in Norwegian pipeline receipts, although the decline was concentrated in Italy and Spain.
Combined European sendout slipped to 2.12 TWh/d on 1-5 August from 2.32 TWh/d on 26-31 July and 2.49 TWh/d in all of July. But sendout from UK, Dutch, Belgian and French terminals rose to 711 GWh/d from 697 GWh/d on 26-31 July, climbing as high as 806GWh on 5 August (see regional sendout graph).
In contrast, Italian and Spanish regasification fell by a combined 259 GWh/d.
A sustained rise in prompt prices could encourage northwest European sendout to increase further. But prompt prices still holding at a wide discount to the corresponding September contracts may encourage some firms to preserve their LNG stocks in order to maintain flexibility to ramp up sendout in late summer, especially in markets such as Spain, where LNG stocks account for a large share of stored gas.
But extensive upstream maintenance could pare Norwegian gas available for export towards the end of the month and into September. This could require other sources of supply to step up, unless injection demand or consumption recedes.
