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Norwegian gas supplies to Europe, UK at top of five-year range again in August

Highlights

Pipeline gas exports reach 9.5 Bcm in August

Supplies in 2022 up over 6 Bcm year on year

European gas prices hit new records in August

Norwegian pipeline gas exports to continental Europe and the UK remained at the top of the five-year range in August amid record-high European prices, an analysis of data from S&P Global Commodity Insights showed Sept. 2.

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Norwegian gas deliveries totaled 9.5 Bcm in August -- or an average of 306 million cu m/d -- with supplies at the top of the five-year range for the seventh consecutive month.

There was some planned maintenance during August -- particularly in the second half of the month -- that kept a lid on exports.

Supplies were also impacted by unplanned maintenance work at a number of assets, including the Kvitebjorn and Troll gas fields and the Kollsnes and Karsto processing facilities.

September is set to see more planned maintenance works, with a particularly packed schedule across a number of assets in Norway, including at Troll, Oseberg and Kristin.

High prices

Still, Norway's gas supply remains historically strong, with flows boosted by moves by state-controlled Equinor and others to divert gas usually used for reinjection for oil recovery for exports to Europe.

Producers have been incentivized to maximize Norwegian gas supplies given the record-high European gas prices.

Prices have been at sustained highs since September 2021, first due to Russian supply constraints and concerns over storage, followed by a surge in prices after the Russian invasion of Ukraine Feb. 24 and then cuts in Nord Stream flows.

Platts assessed the Dutch TTF month-ahead price at an all-time high of Eur319.98/MWh Aug. 26, according to data from S&P Global Commodity Insights. It was last assessed at Eur245.53/MWh Sept. 1.

Norway has pledged to do what it can to boost exports to Europe to help with the energy crisis, and pipeline gas exports in the first eight months totaled 76.1 Bcm, up by more than 6 Bcm year on year.

In July, Norway's energy ministry also said it had approved adjusted production permits for six key fields, with the changes set to contribute to Norway's estimates for increased gas output in 2022.

In May, Norway raised its estimate for gas production this year by 6% to 122 Bcm as high prices incentivize increased gas output across the Norwegian Continental Shelf.

Country flows

On a country-by-country basis, supplies of Norwegian gas to Germany remained particularly robust at 3.7 Bcm in August, the highest monthly import level since April.

Germany has been hardest hit by the reduction in Nord Stream flows from Russia, and without any LNG import infrastructure of its own, it has turned to Norway to increase supplies.

Norwegian deliveries to the UK totaled 2 Bcm in August, down slightly from 2.2 Bcm in July, which was the highest import level since March.

Supplies to the UK had fallen over April-June as prices at the UK NBP traded much lower than in the continent, disincentivizing producers from sending gas to the UK.

Deliveries to the Netherlands fell to 1 Bcm in August, while flows to France and Belgium were flat at 1.5 Bcm and 1.3 Bcm, respectively.