Europe fills up gas storage at record rate as Asian buyers move away: Kemp

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LONDON – Europe’s gas inventories are recovering at a record pace after the winter as buyers in the region outperform Asian competitors in getting as much gas as possible at any price.

Stocks in the European Union and the United Kingdom (EU28) have risen 151 terawatt-hours (TWh) since the beginning of April and 159 TWh from their post-winter lows on March 19.

Storage is filling up faster than the first wave of epidemic lockdown in 2020, according to data from Gas Infrastructure Europe (“Consolidated Gas Storage Inventory,” GIE, 17 May).

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The storage shortfall that occurred in the second quarter of 2021 and lasted for the winter has been eliminated (

The stock now stands at 450 TWh, up 21 TWh from the previous 10-year average and the 2015-2019 pre-epidemic five-year average.

European gas buyers have proved willing to pay much more for short-term deliveries than their Asian counterparts.

Futures contracts for delivery in northwestern Europe in July 2022 are trading at around $ 100 per megawatt-hour, compared to just $ 68 for delivery in Northeast Asia.

Asia gas stocks

Asian LNG buyers were less active than usual and the region has seen lower inventories than the seasonal average.

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According to tariff data, China does not disclose inventory levels of gas, but LNG imports per month until 2022 were significantly lower than the previous year’s level.

LNG imports fell to 17.3 million tonnes in the first three months of the year from 19.7 million in the same period in 2021, the first fall for at least seven years.

China’s growing coronavirus outbreak and lockdown have severely hampered industrial activity and household spending, potentially reducing gas consumption.

But most of the gas consumption comes from residential and commercial heating instead of power generation so the recession probably reflects the decision to allow stocks to fall instead of paying exceptionally high prices.

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Japan’s gas inventories have also been allowed to decline as utilities refuse to pay record prices in competition with Europe.

The stock fell to 1.49 million tons at the end of February, the latest data available, the second lowest for the year since 2015.

Japan imported significantly less LNG in January and February this year than in 2021, according to data from the Ministry of Economy, Trade and Industry.

With war with Ukraine and sanctions disrupting pipeline supplies from Russia, Asian importers have rushed to Europe to replenish their reserves somewhat faster.

However, this may mean that Asian buyers will have to accelerate purchases towards the end of the year, keeping prices higher, even as Europe’s own stocks continue to run out in the next few months.

Related columns:

– US gas prices rise as LNG shocks in Europe and Asia (Reuters, May 6)

– Europe begins fast to refill gas storage (Reuters, May 4)

– US gas storage emptied by export to Europe and Asia (Reuters, April 8)

– European gas stocks end winter at comfortable level (Reuters, April 5)

John Kemp is a Reuters market analyst. Published opinions are his own (Edited by David Evans)

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