Planned and unplanned outages in Norwegian gas infrastructure are expected to significantly impact gas supply to Europe, according to ICIS, the world's largest petrochemical market information provider.
Daily capacity cuts in Norway are forecast to exceed 130 million cubic meters by the end of August, compared to below 20 million cubic meters per day during the final week of July, ICIS said in a report.
Substantial reduction in supply could lead to price volatility and market uncertainty, the report revealed.
ICIS said that European gas prices across July failed to match the highs of June with weak fundamentals capping gains in the market across recent weeks.
'Some support was found from unplanned maintenance to Norwegian gas infrastructure and an unplanned outage to the US Freeport liquefaction plant. Fears of further Russian supply cuts remain a constant, although reduced, threat to the upside,' ICIS reported.
Norwegian gas supply to Europe will remain a talking point with planned outages to ramp up and push daily capacity cuts beyond the 130 million cubic meters per day threshold by the end of August, according to Gassco data.
'Unplanned outages, which have been a feature of the summer months, could push cuts higher still. In comparison, daily capacity cuts were below 20 million cubic meters per day during the final week of July,' ICIS said.
ICIS noted that Russian flows to Austria linked to OMV's 6.9 billion cubic meters per year Long-Term Contract (LTC) with Gazprom Export are set to continue as normal during the month of August, after there were no irregularities regarding payments on June 20.
'The next date by which European energy companies that still have active LTCs with Gazprom Export will have to make their next monthly payment for the previous month’s delivery is 20 August, which could see risk premium concentrated around this date. However, it has been more than two months since OMV first warned the market of potential supply cuts and none have materialised in the interim which appears to mitigate associated supply risk so far,' it noted.
By Murat Temizer
Anadolu Agency
energy@aa.com.tr