BAKU, Azerbaijan, Nov.3
By Leman Zeynalova – Trend:
In Q1-3 2021, total supply to the European market was 344 bcm, down from 349 bcm in the same period in 2019, Trend reports with reference to the Oxford Institute of Energy Studies (OIES).
“Yet during Q1-3 2021, production, pipeline imports, and LNG imports were all lower than in the same period in 2019. The European market was effectively balanced by storage: both larger withdrawals in Q1 2021 and smaller injections in Q2-3 2021. While gas consumption in 2019 was boosted by the ‘supply push’, in 2021 it appears to have been driven by a ‘demand pull’. Not only has industrial demand rebounded after the initial impact of lockdowns in 2020, but the particularly cold Q1 contributed to much higher demand for space heating,” OIES said in its latest report.
Meanwhile, the OIES analysts note that gas demand for power generation was supported by lower-than-usual wind power generation, and particularly by the combination of rising coal and carbon prices that kept gas above coal in the power generation merit order for much of the year to date, despite the rising gas prices.
“On the supply side, the ongoing decline in European gas production – particularly in the Netherlands, where production at the Groningen field is scheduled to cease in mid-2022 – has been widely reported. The global LNG market tightness means that the decline in European LNG imports – as cargoes are drawn away to Asia – is also to be expected. What was perhaps not expected was the slight decline in pipeline gas imports. A slight increase in pipeline imports from Norway (+0.8 bcm) and more substantial increases from North Africa (+9.7 bcm) and Azerbaijan (+5.3 bcm – caused by the launch of the Trans-Adriatic Pipeline, TAP, in January 2021) were more than offset by the decline in imports from Russia (-25.6 bcm).”
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