French LNG regasification could remain subdued in the coming weeks as the country has little underground storage space remaining while demand could stay muted.
French sendout was 541 GWh/d on 1-15 August, on track to be the lowest for any month since November 2021, with the exception of March 2023 when regasification was restricted by industrial action at all four of the country's import terminals (see sendout graph).
Weak demand to continue
French demand could remain limited owing to increased nuclear capacity availability and limited scope for early heating demand.
French aggregate gas demand averaged 426 GWh/d on 1-15 August, on track to be the lowest for any month since January 2007.
Consumption has been muted by weak industrial consumption, which has yet to recover from high prices over the past year and a half, while demand from households and small businesses has also been below average (see consumption graph). And power sector gas demand has been limited, with solar and wind generation well on track to set new record highs in August (see power generation graph).
Power sector gas demand is likely to remain muted as a result of much higher nuclear availability expected for the second half of August. French nuclear unavailability is scheduled to fall to 20.5GW on 16-31 August from 29.1GW earlier this month, according to French utility EdF's schedule published today.
And hot weather could prevent any early heating demand in September. Long-term forecasts today anticipated minimum temperatures in Paris remaining at least 2°C above seasonal norms until late September.
Little remaining storage space
Weak demand has led to storage injections stepping up in recent months, leaving stocks well above average levels and limiting the scope for injection demand over the coming months.
The high-calorie stockbuild averaged 752 GWh/d on 1-14 August, according to the latest available data, way above the three-year average of 575 GWh/d for the period. And the country held high-calorie stocks of 106TWh on the morning of 15 August, equivalent to 85pc of capacity, leaving just over 19TWh of available high-calorie space. This was up from an average of 98.5TWh held in storage on this date over the past three years.
France still has slightly more storage space to fill as a percentage of its capacity than other European countries. Italy and Germany have already filled storage sites to above 90pc of capacity, well ahead of the November target set by the EU for reaching this level of storage. But the amount of space to be filled is similar to that in France, with around 20TWh of remaining space in Germany and 19TWh in Italy.
Strong pipeline imports could continue to limit France's need for higher sendout. The French Peg day-ahead price closed at a premium to the Italian PSV yesterday, which could suggest a continued incentive for pipeline flows from Italy to France through Switzerland in the immediate term. French net pipeline imports have risen in recent days, climbing to their highest on 11 August since early April (see pipeline graph). But there could be little incentive for strong pipeline receipts next month, with the Peg front-month contract closing at discounts to the PSV, Dutch TTF, Spanish PVB and Belgian ZTP yesterday.
