Europe’s two largest suppliers of pipeline gas Equinor and Gazprom have reportedly lost market share for the first time in at least four years amid a tripling in LNG imports into the region over the past ten months.
According to Reuters, LNG imports into Europe jumped due to lower than expected spot demand from Asia, which sent European gas prices to 10-year lows and filled European storages to multi-year highs.
The share of LNG in gas supplied to western and central Europe increased to 14 percent between October 2018 and August 2019 from 5 percent in the same period of 2017-18.
The share of Norwegian gas dropped to 33 percent from 38 percent, which is a multi-year low.
Gazprom’s share was around the average of the past three years, edging down by 1 percent from the previous year to 32 percent. But this marks the first year-on-year drop since 2014-2015, due to low gas demand in Europe.
LNG from the United States into northwest Europe accounted for 2 percent of total gas supply into the region, contributing to the strong increase in LNG in Europe.
Despite its market share loss, Gazprom’s total gas exports to Europe rose as the region imported 9 percent more gas from October to August, compared with the same period in 2017-2018.
Marina Tsygankova, gas market analyst at Refinitiv, told Reuters: “Most of the increase which we see in Russian supply this year came to Slovakia and the Czech Republic – countries which do not have direct access to LNG and which need to prepare their storages in case of transit via Ukraine stops from January 2020.”
The gas transit agreement between Russia and Ukraine is due to expire at the end of this year, and the lack of progress in talks spurred Europe to stockpile gas to prevent possible supply disruption.
Reuters added that Russian flows had given some ground to LNG volumes in countries with LNG terminals.
The drop in Norwegian flows, meanwhile, was seller-driven, with Equinor conducting extensive maintenance on its production and also reducing output, probably for commercial reasons.
In contrast, a drop in Russian gas flows to some western European countries, such as Germany, was buyer-driven. A drop in Dutch production has also helped to create room for LNG arrivals.
The figures reported by Reuters were based on gas volumes for Germany, France, Austria, the Netherlands, Britain, Belgium, the Czech Republic, and Slovakia from October to August over the past six years.