Europe Could Miss 80% Gas Storage Target Due to Market Tightness, Equinor Warns
Equinor CEO Highlights Gas Storage Challenges and Market Dynamics
By Nora Buli
Current Gas Storage Levels and Market Tightness
OSLO, July 22 (Reuters) - The CEO of Europe's largest supplier of natural gas expects the region to fall short of its goal to fill gas storage sites to 80% of capacity before the winter, hampered by market tightness that has increased competition from buyers in Asia.
Gas volumes at European storage sites are significantly lower than the five-year average and at their second-lowest level in 15 years, Equinor chief Anders Opedal told Reuters on Wednesday after the company reported its highest quarterly profit since early 2023.
Equinor's Outlook on Storage Targets
"We do not think that Europe will necessarily be able to fill up its stocks to more than 80% this autumn," Opedal said.
Implications of Lower Storage and Global Supply Shifts
Increased Exposure to Market Price Swings
As a result of lower gas storage levels, which currently stand at 54%, Europe will be more exposed to market price swings this winter than in previous winters, he added.
Impact of Geopolitical Events on LNG Supply
Disruption in the Strait of Hormuz
The U.S.-Iran war has effectively halted shipping through the Strait of Hormuz, including about a fifth of the world's liquefied natural gas, typically delivered to Asian customers.
Reduced Russian Pipeline Gas
Europe, meanwhile, has been unable to call on Russian pipeline gas as those supplies are phased out because of the war in Ukraine.
Competition for LNG and Supply Shortfall
Equinor says that Europe relies on LNG to meet about 30% of its import needs, but supply is now missing.
"The gas that was supposed to come from Qatar was supposed to go to Asia, and that means that LNG that earlier in the year came into Europe is now going to Asia," Opedal said, referring to the increased competition for global supplies.
Reporting and Editing Credits
(Reporting by Nora BuliEditing by Terje Solsvik and David Goodman)
