British natural gas storage stocks slide as LNG levels hit 14-month low
British natural gas stocks fell for the fourth consecutive week, and now stand lower than volumes in store at the same period last year for the first time during this gas year.
Withdrawals took centre stage throughout April following the gas leak and subsequent outage at French gas and oil major Total's North Sea Elgin/Franklin field. But with demand falling in early May withdrawals have continued at a slower pace.
During the week leading to 3 May, net withdrawals of 12 million cubic metres (Mm³) were made, according to UK system operator National Grid data, leaving stocks at 2.397 billion cubic metres (Gm³). The decline has meant aggregate gas in store now stands 136Mm³ below the volume at the same time in 2011, the first time gas in store has dipped below levels in the last gas year.
A combination of system shortness, near-term supply concerns and financial opportunities led to the intermittent withdrawals. Early in the week, with the system struggling for length, as Norwegian deliveries had been curbed because of an outage at the Kollsnes processing plant, and a lack of scheduled LNG tanker deliveries, capacity holders began to withdraw from storage. But those with have capacity at LNG sites were reluctant to further deplete falling stocks.
The withdrawals were supplanted by a brief switch to injections as temperatures picked up in tandem with the return of Kollsnes.
The intermittency with which the South Morecambe field has been operating recently also spurred withdrawals. Alongside this, some capacity holders ensured they would not miss out on a clear arbitrage opportunity by withdrawing at spot prices that carry a premium to the Balance-of-Summer.
Net withdrawals of 8Mm³ took the volume of gas in Rough to 2.116Gm³. The site contains more than 88% of gas stored in the UK, and is at 57% of capacity.
Medium-range stocks fell by just 4Mm³ during the week.
Aggregate LNG stocks fell to a 14-month low, as send-out maintained a heady rate of 53Mm³/day through the week. With fewer LNG tankers arriving over the period, stocks plunged to just 35% of capacity, leaving just 436Mm³ in store. JT
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