Aggregate gas demand fell in Belgium and the Netherlands in November, owing to mild weather, but rose slightly in France on higher HDDs. Strong Asian LNG demand curbed port receipts into the region and slowed LNG sendout, leading all three countries to increase pipeline imports.
Aggregate Dutch demand fell by 0.23 bcm (6%) y/y to 3.90 bcm in November as a small rise in industrial demand was offset by a large drop in LDZ demand due to milder weather. End-user gas demand in Belgium fell by 40 mcm (2%) to 1.23 bcm last month, as LDZ demand slipped by 30 mcm (3%) y/y to 1 bcm. French consumption rose by 60 mcm (1%) y/y to 4.80 bcm, supported by higher LDZ and industrial demand. French power sector gas demand was flat y/y at 0.57 bcm, but it was well above the five-year November average owing to ongoing outages cutting EDF’s nuclear capacity.
Once again, the Netherlands offset lower domestic output by increasing Norwegian imports and easing net exports. Lower Dutch production supported TTF prices last month, leaving the NBP-TTF D+1 basis tighter than the UK’s 1.8 p/therm winter 2017/18 commodity charge on several days last month and slowing BBL exports by 0.67 bcm (70%) y/y to 0.29 bcm. Net imports into Belgium from Germany slipped by 0.21 (39%) y/y to 0.35 bcm, the result of lower UK demand for continental supply. Pipeline exports from Norway into France rose by 60 mcm (5%) y/y to 1.43 bcm, while imports from Belgium into France rose by 0.30 bcm y/y to 1.60 bcm. Aggregate LNG sendout in the region fell by 90 mcm y/y to 0.22 bcm. France exported 0.15 Mt of LNG in November, the highest for the month since at least 2011.
Storage withdrawals from the region in November totalled 2.3 bcm, down from 3.7 bcm in November 2016. Mild weather and a slower stockdraw helped narrow the y/y storage gap by 1 bcm from a month earlier. Stocks stood at 19.5 bcm on 1 December, down by 1.8 bcm y/y.
For December, we expect demand across the three countries will fall by a combined 0.47 bcm y/y, though we still expect growth of 0.25 bcm y/y in Q1 18. Both of these forecasts are driven largely by an assumption of a reversion to seasonally normal temperatures and only a modest y/y rise in nuclear availability in France (which will be offset by much lower French hydro levels). While short-term forecasts are for colder-than-normal weather, seasonal outlooks are generally for a warmer December than normal. In summer 2018, the three countries are forecast to see gas demand rise by a combined 0.89 bcm y/y, with all of that down to the power sector coal-to-gas switch, persistence of low hydro levels in France and only moderately lower levels of French nuclear outages. In 2019, we expect a 1.25 bcm y/y hike in gas demand, mostly from Dutch coal-to-gas switching.