French LNG shipments decline as maintenance cuts supply in June

Strong points

LNG emissions down 43% in the month from June 1 to 14

Norwegian gas flows emerge as main source of supply

June sees net withdrawals for the first time since 2016

French LNG shipment volumes fell in June due to maintenance at major LNG terminals, stoking supply issues after a brief period of net gas storage withdrawals, according to an S&P Global Commodity Insights analysis.

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French LNG emissions have been a stabilizing factor in the European gas market since the Russian invasion of Ukraine. But its stabilizing influence could fade as Russian gas flows westward have diminished with the start of the maintenance season.

French LNG emissions averaged just below 46 million m3/d from June 1-14, down 43% from the May average and the lowest monthly level since 2021, data shows. of S&P Global.

At the same time, the country’s LNG stocks reached their lowest point since the end of April at 386 million m3 on June 14, down 11% over one year and nearly 15% below the five-year average over the period.

The Fos Cavaou and Montoir LNG terminals are undergoing maintenance, with work due to begin later in June, according to data from S&P Global.

Maintenance of the Fos Cavaou LNG terminal began on May 30 and should be completed on June 20, according to Fosmax LNG. The maintenance would remove a capacity of 23 million m3/d, according to data from S&P Global.

Maintenance of the Montoir LNG terminal began on June 5, said Elengy. The turnaround would remove some 9 million m3/d until June 17, according to S&P Global. The terminal is expected to be completely shut down by June 18, making 27 million m3/d of capacity unavailable until July 1.

In addition, the total 38 million m3/d capacity of the Fos Tonkin LNG terminal will also be made unavailable from June 18 to 26, with 4 million m3/d of offline capacity until July 8, according to S&P Global.

However, data from S&P Global shows that six potential carriers will head to French LNG terminals by the end of June, with Spain and Belgium expected to remain the main mainland destinations for cargo.

As French LNG shipments dwindled, pipeline flows from Norway emerged as the main source of supply for the French gas system from June 5-7 for the first time since late February. But scheduled maintenance at the Dunkirk receiving terminal from June 8-10 resulted in no Norwegian gas pipeline throughput for the period, according to French natural gas transmission operator GRTgaz, after averaging nearly 51 million m3. /d in May.

Norwegian gas flows rebounded on June 11 and amounted to 52 million m3/d on June 14, again serving as the primary source of supply for the French gas system.

Storage of unsafe injections

The absence of Norwegian gas flows and the decrease in French LNG shipments reversed the dynamics of storage, with net withdrawals of gas storage observed from June 8 to 10 for the first time in June since 2016.

Net gas injections into storage averaged nearly 33 million m3/d from June 1 to 14, i.e. more than half over the month and nearly 29% below the five-year average for June. The May average for net gas storage injections was around 73 million m3/d.

French gas reservoirs were about 53% full on June 10, according to Gas Infrastructure Europe AGSI. Net injections have rebounded since June 11, with French gas stocks last reported above 6.6 bcm on June 14.

With the easing of flows, the daily discount of the French PEG compared to the Dutch TTF tightened in June to settle on average at 5.53 euros/MWh from June 1 to 15, i.e. more than half compared to the May average of 11.95 euros/MWh. Market players have said they are concerned that the extended shutdown of the 15 million tpy, three-train Freeport LNG export terminal in Texas will intensify competition for LNG cargoes between the Europe and Asia.

The day-ahead PEG-TTF discount widened on June 15 to reach 12.85 euros/MWh, despite the 12.9% gain in the French PEG over the day, which will be valued at 96.85 euros/MWh after the reductions in Russian gas flows to the west via the Nord Stream gas pipeline. is mobilizing on European gas hubs.

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