Russia’s natural gas supplies to northwestern Europe are unable to meet demand expectations as the majority of the supplies are destined for central Europe, Tomas Marzec-Manser, head of Gas Analytics at Independent Commodity Intelligence Services (ICIS), the world’s largest petrochemical market information provider, said Tuesday.
Manser, in his speech during the Flame energy congress in Amsterdam on Tuesday, said that with such high gas demand on the continent, European natural gas prices surged in markets like the Dutch Title Transfer Facility (TTF).
Prices were put under pressure, showing record highs not only from greater demand but from a 15% year-on-year decrease in natural gas storage levels in Europe.
He said this 'nervous' price hike has contributed to the European energy crisis, which has been compounded by gas supplies directed elsewhere amid unplanned outages and upstream issues. This has been seen with a ramp-up in LNG imports to Brazil and with outages from the drought in China.
Furthermore, he said 'some LNG liquefaction underperformed across Norway, Peru, Trinidad and Nigeria by around 7.1 million tons or 10 billion cubic meters year on year over the summer. There were fires in Norway, compressor failure in Peru, declines in feed gas in Trinidad and maintenance in Norway.'
He added that Algeria’s pipeline supplies have not met expectations and will now suffer transit bottlenecks.
'Russian pipeline supply to northwestern Europe has not recovered to pre-Covid levels,' he said.
He explained that as most of the gas was exported to central Europe and with large volumes designated for Turkey, supplies to western Europe are not at full capacity, and are limited for northwest Europe.
Manser also noted that Russia’s domestic storage demand has limited available flexible exports.
By Murat Temizer in Amsterdam