Spanish LNG regas rates fall as gas-for-power demand eases from record highs

LNG regasification rates in Spain eased back from recent highs as rising renewable generation in the country led to gas-for-power demand falling in early December after hitting record highs in late November, an analysis by S&P Global Platts showed.

Spanish LNG regas fell back to as low as 40 million cu m during the Dec. 5 gas day, the lowest daily volume in over 50 days, on the back of a weaker requirement from gas-fired power plants to generate electricity, data from Platts Analytics showed.

Moreover, LNG regas for the Dec. 1-7 gas days has averaged 63 million cu m/d compared to the November average of 73 million cu m/d and the over 100 million cu m/d levels seen during both the Nov. 29 and Nov. 30 gas days, the data showed.

Nonetheless, Spanish LNG regas rates remain comfortably higher on an annual basis when compared to the 40 million cu m/d average from December last year due to the loss of Algerian pipeline gas imports after the GME contract expired at the end of October.

Gas-for-power demand came in at its highest level since at least January 2010 in late November, reaching as high as 67 million cu m during the final gas day of last month, with the November total of 1.150 Bcm the highest seen for a calendar month since July 2020.

Pipeline gas imports from both Algeria and France were largely unchanged over the recent higher gas-for-power demand, implying that more emphasis has been placed on LNG as the swing source of supply compared to recent years.

Weaker gas-for-power demand could continue for the near-term, with data from spotrenewables showing that wind-power generation in Spain would stand at 16.9 GW during peak hours for Dec. 8 and remain comfortably above the 10 GW mark through until Dec. 12, when calmer conditions are set to move over the region with wind-power generation forecasts below the 1 GW mark for both Dec. 12 and Dec. 13, before recovering to 2.2 GW Dec. 14.

Indeed, data from Enagas showed that Spanish gas-for-power demand was nominated at 132 GWh (12 million cu m) for the Dec. 9 gas day, which if realized, would be the lowest seen since the final day of October.