EIA: European gas storage inventories set all-time March record

European natural gas storage inventories as of Mar. 1, 2020, were 60% full, the highest ever recorded level for the start of March, according to Gas Storage Europe’s Aggregated Gas Storage Inventory (AGSI+) and as reported by the US Energy Information Administration (EIA). European stock levels for both January and February 2020 were the highest ever recorded for those months.

Europe’s high levels of natural gas in storage are the result of a mild winter, which limited winter heating demand, and growing natural gas imports by pipeline and as LNG. Relatively mild winter weather across Europe—and especially in northern Europe, where natural gas heating is more common—reduced demand for residential and commercial heating. As a result, natural gas withdrawals from storage were lower than average. Europe’s natural gas storage capacity utilization for the first day of March has typically been 38%, based on the previous 5 years.

LNG imports into Europe were relatively low between 2012 and mid-2018, but increased substantially in 2019, averaging 11 bcfd, according to EIA, almost twice the volume of the 2 previous years. LNG imports set monthly records of 14 bcfd in December 2019 and February 2020 (excluding re-exports), implying a Europe-wide regasification capacity utilization of almost 60%.

Russia and the US increased LNG exports to Europe last year by an estimated 1.4 bcfd and 1.5 bcfd, respectively, compared with 2018. The US has been the largest LNG supplier to Europe since November 2019, EIA said, and in February 2020 LNG imports from the US reached a new record of 5.1 bcfd, nearly double the volume of Europe’s second-largest supplier, Qatar.

European pipeline import capacity has increased in recent years, including the Trans-Anatolian Pipeline from Azerbaijan. Additional sources of supply into the European market are entering service in 2020. In January, the Turk Stream pipeline entered service, delivering natural gas under the Black Sea directly to Turkey and Bulgaria. The Trans Adriatic Pipeline, which will deliver natural gas from Azerbaijan to southeast Europe, is undergoing commissioning and should be completed in mid-2020.

European natural gas prices were at relatively low levels in 2019 and continue at those levels so far this year, according to EIA. The spot price of natural gas at the UK benchmark National Balancing Point averaged $3.66/MMbtu in January, an all-time low for the month. The price of natural gas at the Title Transfer Facility trading hub in the Netherlands averaged $3.62/MMbtu in January, also a record low for the month and less than half the 2018 average price.