Norwegian gas production in October slumped by 0.2 bcm y/y to 10.6 bcm amid unplanned outages. In the first half of November, particularly mild weather weighed on output, with producers reluctant to hike flows amid weak demand, although the onset of this week’s cold snap should see flows ramp up. Still, the y/y output slump seen in October, and that we expect to run to end-November, has led us to revise down our Norwegian production forecast for Q4 18 to 31.5 bcm, lower y/y by 1.3 bcm (4%). We forecast production of 123 bcm in 2019, higher y/y by 0.5 bcm. However, any late additions to the summer 2019 maintenance slate would lead us to revise downward our full-year 2019 forecast.
Following low October production, the lowest for the month in four years, output in the first half of November has also been well below the seasonal norm. November’s anaemic flows are partly down to unplanned outages, with the Kollsnes processing facility shut for nearly a full day on 8 November after a collision between a Norwegian navy frigate and an oil tanker near Bergen. Kollsnes returned to service later that day but has since suffered small (and ongoing) constraints. Low output so far this month is also likely due to mild weather in Northwest Europe resulting in weak heating demand, thus providing little incentive for operators to lift production.
Forecasts for a colder-than-average weather through month-end should lead Norwegian flows to ramp up through the rest of the month. The long-anticipated start-up of the 8 bcm/y Aasta Hansteen field should support supply later in Q4 18, though it is unclear exactly when output will begin, as the field’s start date has seen many delays. In late October, the operator (Equinor) moved first gas from 4 November to a broad Q4 18 timeframe, leading us to move it into our December balances. Equinor also said that the field will have a faster ramp-up than previously expected, hitting 12 mcm/d before rising to its 23 mcm/d plateau. The field’s gas will be processed at Nyhamna, which ties into the wider transportation network at Sleipner.
Aasta Hansteen’s faster ramp up has led us to revise our Q1 19 up by 0.6 bcm, with our 2019 forecast now at 123 bcm. As always, unplanned outages and any further additions to the Gassco summer schedule provides some downside. Already, some small outages have been added to that schedule over the past few weeks, including a 30 mcm production and capacity cut in July.
|Fig 1: Production forecast, bcm||Fig 2: Production forecast, bcm, y/y|
|Source: NPD, Energy Aspects||Source: NPD, Energy Aspects|