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Maintenance work in Norway increases pressure on energy prices

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OSLO, Aug 26 – Norway, which has overtaken Russia as Europe’s biggest gas supplier after the Ukraine war, will cut its gas exports sharply next month due to heavy maintenance activity, with some work postponed. since the beginning of the year.

Russian flows through the Nord Stream 1 pipeline, which crosses the Baltic Sea and reaches Germany, will drop to zero next week, as the pipeline undergoes maintenance for three days from August 31, and market participants fear they will not resume afterwards.

Low levels of hydropower and nuclear outages in France are also pushing gas and electricity prices in Europe to or near record highs. The benchmark European gas contract hit 330 euros ($330) per megawatt hour (MWh) on Thursday, its highest since March 7.

Norway supplies gas through pipelines to the UK, Germany, Belgium and France and is expected to produce some 122 billion cubic meters (bcm) of gas this year, according to official forecasts made in May, an increase of 8 % compared to 2021 and the possibility of breaking a record set five years ago.

In addition to prioritizing gas sales over reinjection to boost crude production, Norway has pledged to maintain steady supply through the summer as gas flows from Russian pipelines have been reduced.

As a result, the pipeline operator, Gassco, has had to delay some planned outages.

“This year some scheduled maintenance outages have been adjusted to maintain a high gas supply to Europe during the summer months,” a Gassco spokesman confirmed in an email to a source.

Planned and unplanned maintenance will reduce the capacity of 13 fields and processing plants throughout September, with volume loss peaking at 154.68 million cubic feet (mcm) per day on September 7, according to estimates. Gasco data.

At the same time, there is also maintenance work at the outlet terminals in Europe and the UK, which will affect the fate of Norwegian gas next month.

Maintenance operations should reduce global gas production, which will fall to 323.9 mcm/day, the lowest point this year, according to a forecast by the Norwegian Petroleum Directorate.

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