The volume of gas in storage at Belgian’s only storage facility, Loenhout, could reach maximum available capacity by the middle of September if the current bumper injection rate is maintained.
Gas in storage at Loenhout surpassed last year’s maximum level of 483 million cubic metres (mcm) on 12 August. Since then, an additional 65mcm has been injected into the site at an average rate of 5.9mcm/day.
August’s to-date average daily injection rate of 5.8mcm/day is the highest monthly average on record. If this rate is maintained, the Loenhout facility will reach maximum capacity of around 700mcm by 20 September.
Injections have risen due to increasingly profitable spreads between the Zeebrugge Day-ahead and Zeebrugge Winter ’16 contracts. The premium of the Winter ’16 contract versus the Day-ahead averaged 9.96p/th between 1 and 23 August, far higher than the June average of 6.1p/th.
The spread hit a two-year high of 13.825p/th on 19 August, before retreating by more than 2p/th on 22 August, following news that a winter withdrawal restriction at Britain’s largest storage facility would be significantly less severe than first thought. This eased pressure on what looked set to be a tight winter for northwest European supply.
Belgium’s previous storage year, commencing 15 April 2015, was characterised by low and unprofitable spreads, which led to little gas being injected into storage in comparison to this summer. In gas summer 2015, the Zeebrugge Winter+1 contract was assessed at an average premium of just 2.45p/th to the Day-ahead.
Conversely, spreads in the preceding 2014/15 storage year were highly profitable, with the Winter+1 contract regularly assessed at a premium of around 15-20p/th to the Day-ahead. firstname.lastname@example.org