Insight
UK summertime blues: coronavirus pushes gas market to deadlock
*Please note that this report only includes an Excel data file if this is indicated in "What's included" below
Report summary
The UK gas balance has reached a deadlock for the summer. With weak demand persisting and UK production holding up, the market space has evaporated. Norwegian flows have already dropped to a floor but LNG imports into the UK's South Hook terminal have climbed as LNG exporters struggle to place cargoes. NBP has collapsed against continental benchmarks in order to incentivise flows out of the UK - but deeper discounts will be needed for even higher flows. The biggest losers exposed to the deteriorating UK summer outlook will be LNG exporters hoping to place cargoes into the UK market. There simply won’t be space. Consequently, the UK’s effective regasification capacity will be capped at 50% through the summer. LNG exporters desperately looking for market are fast approaching another brick wall.
Table of contents
- Executive Summary
- Introduction
- The NBP discount to TTF deepens
- UK gas demand is under pressure
- Exports are reaching their limits
- With space for storage injections very limited
- UK domestic gas production is holding firm – so far
- with Norwegian piped suppliers and LNG importers adapting
- but the space for both Norway and LNG will shrink further
- Has all of the UK market space already run out?
- Conclusions
Tables and charts
This report includes the following images and tables:
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NBP-TTF differentialUK gas demandUK gas infrastructure
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Pipe exports - Ireland (Moffat Interconnector)Net pipe imports - IUK & BBLPipeline tariffs – IUK & BBLUK storage inventoryUK gas productionUK gas production against short-run marginal cost (SRMC) of production and total annual opexDaily pipe imports from NorwayDaily LNG send-outSummer UK gas supply-demand balance
What's included
This report contains:
