With low Russian gas pipe supply to Europe, LNG shipments are expected to remain significant throughout the summer, particularly from the US, according to the latest outlook from Independent Commodity Intelligence Services (ICIS).
In its latest outlook on gas and power, ICIS forecasts that Europe will import some 48 million tonnes of LNG over the next six months, down from 52 million tonnes in winter 2023–24 and 3 million tonnes lower than in the summer last year.
According to the outlook, European gas demand will remain subdued relative to pre-gas crisis levels, with industrial gas demand likely to be 20% below the 2017–2021 average.
‘Gas offtake from the power generation sector is likely to be muted with an improved nuclear and renewable production forecast compared with last year, it said in the report.
However, mainland Europe will see the commercial start of two entirely new LNG terminals this summer: the Stade Floating Storage and Regasification Unit (FSRU) in Germany with 5.4 million tonnes per year and the Alexandroupolis FSRU in Greece with 3.9 million tonnes per year.
Europe’s natural gas price benchmark, the ICIS TTF, will average €28.32 per megawatt-hour for deliveries over the six-month period between April and September.
This is a decline from the summer 2023 delivery price of €34.29 per megawatt-hour and from the winter 2023/2024 period when prices traded on the ICIS TTF day-ahead market, averaging €33.97 per megawatt-hour.
ICIS predicts that prices will average €33.07 per megawatt-hour for winter 2024–2025 deliveries.
Sufficient European storage levels will help to ensure prices are constrained, and according to ICIS, storage levels in the European Union and Great Britain will commence the summer at 57%, one percentage point higher than last year but crucially the highest in over a decade.
‘We predict that storage will already be 95% full by the start of September, well ahead of the EU’s target of 90% fullness by November 1 for its member states,’ it said.
Norway will retain its position as Europe’s main source of gas over the summer, although annual maintenance offshore will occur over this period, especially during September.
