Norwegian gas flows to Europe rise to highest level since January 2019

Norway's pipeline gas exports to continental Europe and the UK topped 10 Bcm in October, reaching the highest monthly level since January 2019, an analysis of data from S&P Global Platts Analytics showed Nov. 3.

Norwegian deliveries totaled 10.1 Bcm in October, well above the five-year average, as suppliers looked to make the most of record high European gas prices and some producers diverted re-injection gas for export.

European gas prices have risen strongly in the past few months, building on a sustained rally from the start of 2021.

S&P Global Platts assessed the TTF day-ahead price at a record high of Eur116.10/MWh on Oct. 5, with price volatility continuing through October and into November. The TTF day-ahead price was assessed at Eur69.38/MWh on Nov. 2.

With the summer maintenance season now complete, Norwegian flows rose to close to 350 million cu m/d at times in October.

Norway's state-controlled Equinor said in September it expected to produce more gas from its key Troll and Oseberg fields in the fall and through the winter after the country's energy ministry approved higher production permits for the new gas year.

Both permits have been increased by 1 Bcm, meaning the Troll permit is up from 36 Bcm to 37 Bcm and Oseberg up from 5 Bcm to 6 Bcm.

The higher permit for Troll will in part also take into account production from the field's third phase, which started up in late August.

Troll Phase 3, which will extend both the life of the field and its plateau production, is considered key to Norway's plans to offset declining gas production elsewhere on the Norwegian Continental Shelf.

Injection volumes

Norway's October flows were also boosted by moves by Equinor and others to divert gas -- usually used for re-injection for oil recovery -- for export to Europe.

Equinor said Oct. 27 it had decided to redirect injection gas produced at the Gina Krog field to supply more gas volumes to Europe, while Aker BP said Oct. 28 it would divert injection gas from its Skarv field into the European market.

Equinor also said it would look across its whole Norwegian portfolio to see if similar action could be taken at other fields.

The decision to use injection gas for exports is set to give Norwegian supply volumes to Europe a boost over the whole winter, according to S&P Global Platts Analytics.

"Platts Analytics started forecasting a reduction in the Norwegian gas injections directed towards oil recovery back in August," analyst James Huckstepp said Oct. 27.

"We also expect this to occur at the Gullfaks and Asgard fields, driving our Winter-21 Norwegian pipeline export assumption 24 million cu m/d higher year-on-year."

Country flows

On a country-by-country basis, supplies of Norwegian gas in October were up compared with September to all markets apart from the Netherlands.

Norwegian exports to the UK rose sharply to 2.67 Bcm, from 1.71 Bcm in September, while deliveries to Germany rose to 2.65 Bcm from 1.95 Bcm in the previous month.

Supplies to France and Belgium rose month on month to 1.53 Bcm and 1.3 Bcm, respectively.

NCS production, meanwhile, continues to be hampered by the long-term outage at the Hammerfest LNG export facility, which was hit by a fire in September last year.

As a consequence of the shutdown of Hammerfest LNG, the Snohvit, Albatross and Askeladd fields have also been shut in.

The latest guidance from Equinor is for the plant to resume operations at the end of March 2022.