Norwegian gas output was up y/y in June, owing to a lighter annual maintenance schedule, and is on course to be higher y/y again in July.
Aggregate Norwegian production totalled 8.63 bcm in June according to the Norwegian Petroleum Directorate (NPD), up by 0.45 bcm y/y and the highest June total since at least 2009. June output averaged 7.88 bcm in 2010-15. Annual maintenance was scheduled to cut field output and processing capacity by 0.89 in June, 0.56 bcm less than in June 2016, but unplanned works shut-in some output capacity last month, slightly limiting the y/y production increase.
Field level data for May—the latest month for which data are available—indicate that production from the flexible Oseberg field was very strong y/y, a trend that we have seen consistently since January. Oseberg output was 0.21 bcm in May, up by 0.19 bcm y/y. Output from Norway’s other flexible field, Troll, was down by 0.16 bcm (7%) y/y at 2.22 bcm in May. Production from non-flexible fields was down by 0.55 bcm (8%) y/y at 6.61 bcm, owing to a series of planned outages. Aggregate output was also lower due to a sharp fall in output at Snohvit, where production fell by 0.33 bcm y/y to hit 0.18 bcm, which was the lowest for any month since May 2014.
So far in July, Norwegian pipeline exports to Europe have been considerably stronger y/y again, with very little maintenance planned. Annual works are expected to cut production and processing capacity by just 39 mcm this month, and that constraint finished on 2 July. Last year, works cut July capacity by 0.23 bcm. There is an ongoing 5 mcm/d constraint to delivery capacity to the St. Fergus terminal, but that seems to have impacted flows very little so far. Aside from this constraint, which is scheduled to continue until 1 October, there are no Norwegian production or processing capacity constraints scheduled to occur until 17 August. Aggregate pipeline flows to European terminals averaged just above 0.32 bcm on the 2-10 July gas days, up by 50 mcm/d from 0.27 bcm/d the same time last year.
For August and September, scheduled maintenance is going to provide far less disruption to production, with the level of affected output just under 2.0 bcm lower y/y. In each of these months, over 0.95 bcm less gas production will be affected by outages compared to the same months last year. Over H1 17, total gas production was down by 0.3 bcm y/y, but we expect total 2017 production to end the year up by around 1 bcm, all of which will come in Q3 17.