Europe’s gas supply tightens as Norway begins field maintenance

Europe faces a tighter gas market as Norwegian field operators enter the scheduled maintenance season.

Any unplanned extension of the maintenance period would cause an imbalance in the mainland’s gas markets and lead to higher prices, Bloomberg reported.

“Europe is already struggling,” Florence Schmit, a European energy strategist at Rabobank, told the publication. “Any deviation from the planned maintenance season can cause significant fluctuations in gas availability and in turn market prices, particularly this year.”

Norway supplies about 30% of Europe’s natural gas, becoming the largest supplier after most Russian gas flows were cut off. At the moment, there is a risk of a suspension of the remaining flows passing through Ukraine after the latter’s incursion into Russian territory, which would further tighten supply.

Bloomberg points out that an extension to Norway’s gas field maintenance season would not be unusual due to the complexity of the work involved in these operations. “The repairs involve careful balancing of pipeline pressure, while the complexity of the installations and the harsh environment of the North Sea means that it is not unusual for additional work to be discovered,” Bloomberg explained.

“You will always see a change from what was planned; something will take more or less time and that has ripple effects on the rest of the job,” an executive at Norway’s gas pipeline operator Gassco told Bloomberg.

Earlier this month, Saxo Bank’s head of commodity strategy, Ole Hansen, RECORDED that European Union gas stocks were 86.7% full and that the expected slowdown in filling rates due to Norway’s maintenance season should not really affect the final targets ahead of the heating season. The EU has a gas storage target of 90% before the start of winter.

“However, any major disruption in the coming months would increase the need for alternative supplies, mainly through LNG, pushing up prices as Europe competes with Asia and South America,” Hansen added at the time.

By Irina Slav for Oilprice.com

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