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Highlights


Consumption forecast at more than 1.42 Bcm Wednesday

European hub prices all move higher than Eur34/MWh

Still no sign of influx of LNG cargoes into NW Europe

Demand for gas in northwest Europe is forecast to hit a six-year high of more than 1.42 Bcm on Wednesday, according to S&P Global Platts Analytics, as temperatures remain well below seasonal norms due to the Arctic weather front dubbed the "Beast from the East."

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Gas consumption in the main demand centers of the UK, Germany, France, Belgium and the Netherlands is estimated at 1.422 Bcm Wednesday, the highest daily demand in the countries since February 2012 when daily consumption peaked at 1.53 Bcm.

Prices across Europe surged Tuesday, with all the main hubs assessed by S&P Global Platts at more than Eur34/MWh -- or $12/MMBtu.

The UK NBP within-day price surged in early trading Wednesday to as high as 140 p/th -- or more than Eur54/MWh -- while the Dutch TTF day-ahead price was trading higher in early trade on Wednesday at above Eur37/MWh.



European hub gas is currently the highest-priced hub gas in the world, with the hubs trading well above the most prompt Asian spot JKM price for the second half of March, which was assessed by S&P Global Platts at $9.95/MMBtu on Tuesday.

But contracts to buy LNG are typically agreed well in advance, and with March contracts across the European hubs trading around $7/MMBtu, it was likely too late to agree a cargo ahead of the price spikes and trying to secure a cargo now based on the month-ahead price would not be competitive versus the JKM.

Gas storage facilities across Europe are withdrawing at higher rates this week, with stocks at dangerously low levels.

Total stocks in the UK, the Netherlands, Belgium, France and Germany combined stood at 11.15 Bcm as of the start of Tuesday's gas day.

Taking out the UK, the northwest European Continental storage situation looked increasingly bleak at 10.3 Bcm, and is almost certain to dip below 10 Bcm in the coming days at current withdrawal rates for the first time since 2013.


LNG IMPORTS


LNG sendouts are up, but there are no signs of LNG cargoes being diverted to northwest Europe.

In the UK, sendouts are currently running at some 62 million cu m/d, with the Isle of Grain flowing at 32 million cu m/d, its highest send-out level since February 2012.

The last LNG tanker into the UK arrived on February 22 from Qatar, but there are currently no cargoes heading to the UK, according to Platts Analytics.

There are also no cargoes on the horizon for Belgium's Zeebrugge LNG import facility despite Belgian gas storage stocks being almost depleted.

At Gate in the Netherlands, the Fedor Litke -- carrying the 11th spot cargo to be loaded from the Yamal LNG plant in northern Russia -- docked on Monday, but the cargo may not stay in the Netherlands.

Previous Yamal LNG cargoes into Gate have all been transshipped onto other conventional LNG tankers.

The Christophe de Margerie -- carrying the 12th cargo from the Yamal LNG plant -- is due to arrive at Gate on Friday.

France, meanwhile, is due to take two cargoes, one at Montoir and one at Fos Cavou, in the first week of March.

In Italy, LNG terminal OLT Offshore Toscana said Tuesday it allocated a delivery slot for March 7, following a procedure started last week on the activation of a state of early warning by the Ministry of Economic Development due to the cold weather.

The operator of the terminal said the winner of the slot, which it did not name, would be permitted to withdraw gas stored aboard the terminal in the interim period, since the peak shaving service is currently underway.

The user will replenish any gas consumed, by offsetting it from its March 7 delivery.

--Stuart Elliott, stuart.elliott@spglobal.com
--Edited by Jeremy Lovell, jeremy.lovell@spglobal.com