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National Grid: Excess UK Gas Supply Could Help Europe Boost Storage Levels

The UK will have enough gas to meet demand this summer and could sell more supplies to Europe due to low storage levels on the continent, revealed National Grid in its annual summer outlook.

It expects higher UK gas demand in the six months between April and September 2022 compared to last year – forecasting demand at 34bn cubic meters (bcm) compared to 31.9bcm in the same period last year.

Demand is very much in line with supply, chiefly from the North Sea and Norway, which is forecast at 34 bcm compared to 31.5 bcm last year.

The UK has pledged to phase out Russian oil and coal imports, and Business Secretary Kwasi Kwarteng is considering a similar ban on Kremlin-backed gas supplies.

Currently, the UK gets around three percent of its gas from Russia, while the European Union (EU) relies on Russia for 40 percent of its needs.

National Grid suggested the UK would be in a position to provide supplies to the trading bloc, which is vulnerable to escalating geopolitical tensions.

The UK can export gas to Europe via interconnectors, and National Grid expects UK average exports to Europe at 5.4 bcm, up from 0.7 bcm last summer period.

Last month, Russian President Vladimir Putin signed a decree ordering foreign buyers to pay for gas shipments in roubles instead of euros or face going without Russian supplies.

Buyers would have to open up a Gazprombank account which would convert the currency prior to the transaction into roubles.

Most European buyers have refused to do this, prompting concerns about supply.

National Grid explained: “This uncertainty, coupled with high gas prices and low EU storage, means that higher volumes of gas from alternative sources may be required to refill EU storage to minimum levels in preparation for winter 2022/23.”

European storage levels ended the winter season at the end of March at 26.5 bcm, below the five-year average.

The EU has since committed to maintaining storage levels at 90 percent across the continent heading into this winter.

By CityAM

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