Spain's Naturgy Q2 gas sales down 30% on year, LNG sales down 15%

Barcelona — Spain's largest gas group Naturgy on July 22 reported a year-on-year decline of 30% in second-quarter domestic gas sales volumes and a 15% decline in international LNG volumes, with the measures in place throughout the period to combat the spread of the coronavirus playing a major role.

Domestic gas sales volumes were heavily affected by a 72% decline in sales to third parties to 2.6 TWh caused by the shutdown of industry and other businesses across the country, while residential sales were down 31% at 2.7 TWh due to mild weather.

Spanish gas demand in Q2 fell 22% year on year to 71.9 TWh, affected by the lockdown measures and milder weather, according to data form gas grid operator Enagas.

Naturgy's international LNG segment was similarly hit by reduced downstream demand, with volumes down 15% year on year at 26.8 TWh.

The company said it is in the process of renegotiating its long-term gas contracts in line with the mechanisms covered by its agreements.

GNF, with a fleet of 12 methane tankers, is the biggest natural gas operator in Spain and one of the top companies in the Atlantic Basin, with a 9 Bcm long-term contract with Algeria as well as contracts with the US, Nigeria, Trinidad & Tobago, Qatar, Oman, Norway, Russia and Azerbaijan for a combined volume of around 26 Bcm/year.

At the end of the second quarter, the company had agreed 98% of its 2020 volume and 79% of its 2021 and 2022 LNG volumes, it said.

In the pipeline business, the company's EMPL subsidiary, which owns 72% of the 12 Bcm/year Maghreb pipeline from Algeria to Spain via Morocco, reported a 61% drop in volume for the first half of the year to 12.2 TWh, with volumes to Spain down 65% year on year at 6.4 Twh and transit volumes to Portugal down 55% at 5.8 TWh.

In the power generation business, its European volumes fell 14% year on year to 4.6 TWh while its domestic power sales volumes fell 12% to 5.1 TWh.

Generation was affected by a 30% decline in gas-fired output to 2.3 TWh even though its gas sales to domestic CCGTs saw a 12% gain in volume to 5.0 TWh.

Nuclear generation was 28% lower year on year at 0.7 TWh due to a series of planned outages at its Spanish plants.