LNG sendout down 43% on the month over June 1-14
Norwegian gas flows emerge as leading supply source
June sees net withdrawals for first time since 2016
French LNG sendout volumes shrank in June because of maintenance at key LNG terminals, fanning supply concerns following a brief period of net gas storage withdrawals, an S&P Global Commodity Insights analysis showed.
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French LNG sendout has been as a stabilizing factor in the European gas market since Russia’s invasion of Ukraine. But its steadying influence could wane as Russian westbound gas flows have declined with the start of maintenance season.
French LNG sendout averaged just below 46 million cu m/d over June 1-14, down 43% from the May average and at the lowest monthly level since 2021, according to S&P Global data.
Meanwhile, LNG stocks in the country reached their lowest point since late April at 386 million cu m June 14, down 11% year on year and almost 15% below the five-year average over the period.
The Fos Cavaou and Montoir LNG terminals are undergoing maintenance, with works expected to commence later in June, according to S&P Global data.
Maintenance at the Fos Cavaou LNG terminal started May 30 and is expected to be completed by June 20, according to Fosmax LNG. The maintenance would remove 23 million cu m/d capacity, data from S&P Global showed.
Maintenance at the Montoir LNG terminal started June 5, Elengy said. The turnaround would remove some 9 million cu m/d until June 17, according to S&P Global. The terminal is expected to go into full shutdown by June 18, rendering 27 million cu m/d of capacity unavailable until July 1.
In addition, full 38 million cu m/d of capacity at the Fos Tonkin LNG terminal will also be rendered unavailable over June 18-26, with 4 million cu m/d of capacity offline until July 8, according to S&P Global.
However, S&P Global data shows six potential carriers making their way to French LNG terminals by end-June, with Spain and Belgium expected to remain the top Continental destinations for cargoes.
As French LNG sendout eased, Norwegian gas pipeline flows emerged as the leading supply source to the French gas system over June 5-7 for the first time since late February. But planned maintenance at the Dunkerque receiving terminal over June 8-10 resulted in no Norwegian pipeline flows for the period, according to French natural gas transmission operator GRTgaz, after having previously averaged close to 51 million cu m/d in May.
Norwegian gas flows rebounded June 11 and were at 52 million cu m/d June 14, serving again as the leading supply source to the French gas system.
Storage injections at risk
The absence of Norwegian gas flows and shrinking French LNG sendout reversed storage dynamics, with net gas storage withdrawals observed over June 8-10 for the first time in June since 2016.
Net gas storage injections averaged close to 33 million cu m/d over June 1-14, more than halving on the month and treading nearly 29% below the five-year June average. The May average for Net gas storage injections was about 73 million cu m/d.
French gas tanks were about 53% full June 10, according to Gas Infrastructure Europe AGSI. Net injections have rebounded since June 11, with French gas stocks last reported above 6.6 Bcm June 14.
As flows eased, the French PEG day-ahead discount to the Dutch TTF narrowed in June to average at Eur5.53/MWh over June 1-15, more than halving from the May average of Eur11.95/MWh. Market participants said they were concerned that the prolonged shutdown at the three-train 15 million mt/year capacity Freeport LNG export terminal in Texas will intensify competition for LNG cargoes between Europe and Asia.
The PEG-TTF day-ahead discount widened June 15 to reach Eur12.85/MWh, despite French PEG gaining 12.9% on the day to be assessed at Eur96.85/MWh after Russian westward gas flow curtailments through the Nord Stream pipeline triggered price rallies across the European gas hubs.