Exports of Norwegian gas by pipeline to the UK registered their second highestmonthly level in November, with supplies reaching 3.59 Bcm according to datafrom Platts Analytics' Eclipse Energy, on the back of strong UK demand forNorwegian gas and weaker supplies to continental Europe.
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The UK NBP hub enjoyed a widening premium for day-ahead supplies throughNovember, with the spread on November 30 reaching Eur1.23/MWh, incentivizingNorwegian deliveries to the UK.
Norwegian gas supplies to the UK were only higher in January 2017 whenthey soared to 4.05 Bcm due to a prolonged cold snap and a high NBP-TTFspread.
Supplies to continental Europe dipped in November to 6.24 Bcm, the lowestlevel since February, according to data from Platts Analytics.
Flows were curtailed as volumes were diverted to the UK and some correctiveand unplanned maintenance at a number of fields including Oseberg saw acombined 30 million cu m/d impact for part of the month.
Total flows to the UK and continental Europe reached 9.83 Bcm in November, thehighest since March, but down on both the November volumes in 2015 and 2016.
Despite the year-on-year drop in November, Norway remains well on track tobeat its record high exports to the UK and Europe with flows having alreadyreached 102.1 Bcm. That puts volumes 5.5 Bcm ahead of last year.
Assuming continued strong flows through December, Norway could end the yearwith a new record high pipeline supply level of more than 110 Bcm.
Total pipeline supplies last year amounted to a record 106 Bcm -- on a parwith exports in 2015. UK-NORWAY RELATIONS
The continued strong flow of Norwegian gas to the UK comes against thebackground of the UK becoming a tighter market in the winter because of theloss of the country's only seasonal storage site at Rough.
The UK government has acknowledged its growing dependence on Norwegian gas,with the UK energy ministry earlier this year saying that the UK would becomemore dependent on Norwegian gas imports in the future given the UK's move tophase out coal-fired power generation.
Norway has also stressed that it must be able to enter into new bilateraltrade deals post-Brexit that go well beyond a traditional agreement given thedeep economic integration between the two countries.
Norway is not an EU member state, but is part of the European Economic Areawhich allows it to take part in the EU internal market.
Oslo has said Norway must enter into new bilateral agreements with the UK whenthe country leaves the internal market and the EEA, including in the energysector.
It has also said it wants to be part of any transitional arrangements betweenthe UK and EU, and has also urged both parties to allow it a place at thenegotiating table.
Of all of the five direct European importers of Norwegian gas, supplies to theNetherlands again were robust in November, albeit slipping below the 2 Bcmmark for the first time since June.
Supplies amounted to 1.97 Bcm as domestic Dutch production continues to slideand demand for high-calorific gas (H-gas) grew.
Norwegian gas flows to the Netherlands hit an all-time high in August of 2.18Bcm.
Falling Dutch production from the Groningen field -- which has had its outputcapped further as of October 1 to just 21.6 Bcm/year -- has increased the needfor imports.
Flows in November to Norway's other European markets -- Germany, France andBelgium -- were all slightly down year on year.
--Stuart Elliott, firstname.lastname@example.org
--Edited by Alisdair Bowles, email@example.com