BAKU, Azerbaijan, April 18. Europe’s ability to refill storage in summer 2023 to depend on LNG supplies, Trend reports with reference to the Oxford Institute of Energy Studies (OIES).
“The benign circumstances of winter 2022/23 meant that Europe ended Q1 2023 with stocks of 58.5 Bcm – a record for the end of Q1 and 31.1 Bcm higher year-on-year. This means that net injections of 41.4 Bcm between 1 April and 30 September would be sufficient to bring stocks back to 100 Bcm (close to the full capacity of 104.7 Bcm). For comparison, net injections in the period 1 April to 30 September in the years 2017-2022 ranged from 42.8 Bcm to 66.7 Bcm. Therefore, even record low summer injections in 2023 will be sufficient to bring stocks back to close to full capacity,” reads the OIES report.
The report reveals that Europe has a favourable base from which to begin its efforts to reach the European Commission target of filling storage to 90 per cent of capacity (94.2 Bcm) by 1 November 2023.
“In terms of the intermediate storage filling targets set by the European Commission, stocks on 1 April 2023 already surpassed the Commission targets for 1 May and 1 July 2023, while the 76.6 Bcm target for 1 September 2023 could be reached by early June, based on storage refill rates in recent years. If there is one factor that should temper any thoughts that refilling storage in summer 2023 is a foregone conclusion, it is the prospect of a substantial year-on-year decline in pipeline gas supply from Russia,” says OIES.
The pipeline supply from Russia in Q2 and Q3 2022 combined was 30.7 Bcm, and is likely to be around 11 Bcm in Q2-3 2023 – a drop of 20 Bcm. Compensating for that drop will account for two thirds of the ‘windfall’ that Europe has by starting the summer season with storage stocks roughly 30 Bcm higher year-on-year. With this in mind, and with non-Russian pipeline supply (and indeed domestic European gas production) unlikely to be higher year-on-year in summer 2023, Europe’s ability to refill storage in summer 2023 will remain dependent on continued substantial LNG imports (as discussed earlier) and European gas consumption remaining lower year-on-year.
---
Follow the author on Twitter: @Lyaman_Zeyn