Europe’s natural gas market is in a precarious balance as winter begins and external factors will likely lead to a tight market at the end of 2024 and early 2025, according to Torgrim Reitan, chief financial officer at Norwegian energy major Equinor.
The natural gas market and prices in Europe will be shaped in the coming months by the end of the Russia-Ukraine gas transit deal and demand for LNG in Asia, Reitan told Bloomberg TV in an interview on Wednesday.
Equinor is the biggest producer of gas offshore Norway, which is now the single biggest supplier of natural gas to Europe, holding around 30% of the total European market.
Two years ago, Norway replaced Russia as Europe’s top gas supplier after the Russian invasion of Ukraine and the cut-off of pipeline supply to many European countries.
The European natural gas market has been on edge for weeks with the start of the winter heating season, a massive lull in wind speeds in northwestern Europe, a dispute in Austria over Gazprom’s gas deliveries, and the upcoming end of the gas transit deal via Ukraine.
The European gas market is bracing itself for the end of the gas transit deal for Russian flows via Ukraine. The deal expires on December 31, 2024, and Ukraine has said that it would not pursue talks about renewing the agreement with Russia.
Last week, Slovakia’s national energy company, SPP, signed a short-term pilot contract with SOCAR to buy natural gas from Azerbaijan as it prepares for a possible halt to Russian supplies via Ukraine.
Apart from a potential halt to some of the remaining Russian pipeline gas deliveries, European natural gas prices were also pushed up by colder weather in Europe, which boosted demand for heating and gas-fired power generation.
Gas demand and gas-powered electricity demand have jumped in recent days amid the so-called ‘Dunkelflaute’, German for “dark wind lull”, which resulted in low wind speeds and low levels of wind power generation.
By Charles Kennedy for Oilprice.com
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Publish date : 2024-11-20 06:30:00
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