Aggregate end-user demand edged down y/y across Europe in December as mild weather softened res-com demand. Power sector gas burn also shrank across most countries owing to higher French nuclear availability and stronger wind and hydro generation that pushed gas out of the generation mix. LNG sendout remained brisk across most of the region, expanding by 2.7 bcm y/y, which helped the region to more than offset lower Russian (-0.2 bcm y/y) and Norwegian (-0.5 bcm y/y) pipeline imports. UKCS supply climbed, by 0.8 bcm y/y to 3.2 bcm, albeit due to a base lowered by December 2017’s Forties pipeline outage. Aided by weak demand and high LNG sendout, aggregate European storage levels are now at a hefty 6.4 bcm surplus y/y, with inventories at 70 bcm.
UK LDZ demand eased on mild weather, while power imports from France and strong wind generation (+0.4 TWh y/y) helped limit power sector gas burn. Gas-fired generation dropped by 0.6 TWh (5%) y/y while French power imports increased by 0.9 TWh (352%) y/y. Total end-user supply stepped down by 0.4 bcm y/y as pipeline imports fell on muted demand. LNG sendout remained stronger y/y for the third consecutive month, with December sendout at a three-year high of 1.4 bcm (+1.1 bcm y/y).
Res-com consumption across continental Europe eased, while power sector gas demand edged down across most countries. The Netherlands and Belgium were the exceptions, logging small y/y increases. Power sector gas demand in Belgium was up by 4% (0.1 TWh) y/y owing to nuclear outages of some 3.6 GW. Despite sluggish demand, net pipeline imports across Germany, Belgium and the Netherlands were stronger y/y while LNG sendout remained brisk across the region. Aggregate withdrawal from storage was 4.7 bcm in December, a hefty 4 bcm less y/y.
Non-power sector gas demand shrank in Spain, bringing total gas consumption down by 0.2 bcm (6%) y/y. Weak wind output (-1.4 TWh, -25% y/y) softened the strong y/y declines in gas into power, with gas-fired generation down by 0.09 TWh vs an average of 1.1 TWh of monthly declines since June. High French gas stocks (+2.3 bcm y/y) and lower prices following the unification of the French gas hubs encouraged an increase in pipeline imports from France (+0.1 bcm y/y), while Algerian flows and LNG sendout shrank. Withdrawals from storage were 59 mcm (-0.1 bcm y/y).
Italian gas demand declined due to mild weather, while reduced power sector gas burn occurred because of strong hydro generation. As LNG sendout climbed by 0.4 bcm y/y, pipeline imports dropped. Imports of Russian gas through Austria (-0.5 bcm y/y) lead the decline as the CEE storage deficit—now at 1 bcm y/y—persisted through the month and discouraged flows into Italy.
|Fig 1: European consumption and end-user supply, bcm|
|Source: Country SOs, GIE, Energy Aspects|