The overall gas situation in Europe continues to remain stable with gas stores over 90% full as of the end of August. Compared to July, TTF index prices increased in August, briefly reaching €40/MWh at times mainly due to concerns over a potential supply disruption in Australia. Nevertheless, Europe remains on track to enter the 2023/24 winter season with full gas stores as storage levels are currently sitting at 92.80% as of August 31, reaching the EU’s original November storage target of 90% well ahead of time.
A maintenance halt at Norway’s Troll field and Kollsnes processing plant has also impacted supply, most notably to Europe, where Norway has become the biggest source of LNG imports since Russia’s invasion of Ukraine. Supply to Europe already dropped to the lowest in two months by the end of August, and could decline further throughout September as both facilities halted operations completely from August 26 to September 7 as part of the seasonal maintenance work. Any issues with the maintenance could cause prices to rise further. However, these disruptions are currently not expected to impact the continent’s overall energy outlook for the winter.
Gas storage levels in Europe remain high
The EU energy market is stable entering winter; however, there is still potential for unexpected volatility in the coming months. Liquefied natural gas imports remain key to energy stability, and the continent’s dependence on imports from the U.S., the Middle East and other regions still remains a risk. In particular, some have warned that there’s still a risk of international supply drying up if demand from Asia increases in the coming months, especially from China. Unpredictable events such as hurricanes in the Gulf of Mexico could also impact EU imports from the United States.
EU members consider using Ukraine gas storage facilities
High overall gas storage levels in the EU have prompted Europe’s energy industry to begin utilizing gas storage facilities in Ukraine. Ukraine has more domestic gas storage capacity than any country in the EU, despite the ongoing conflict with Russia. Amid hesitancy due to the war, the European Commission has discussed providing guarantees for traders that choose to use Ukraine’s gas storage, but no agreement has been established yet.
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