Montel Magazine 3 2022 - Pipeline sabotage 3 - Page 11

Market talk

declined in recent weeks , due to market expectations of slower growth and “ that ’ s how it should function ”, said Timmermans . LW
Mild , wet , windy winter may ease crisis – forecasters Early indications point to a mild , wet and windy winter in Europe with average heating demand , forecasters told Montel , which could alleviate a looming energy crunch . “ The expectation is for a mild winter with above normal temperatures extending from the UK to Germany , Scandinavia and eastern Europe , with near normal [ temperatures ] from Spain and France to Italy and the Balkans ,” said Steve Silver of US-based forecaster Maxar . A cold winter could exacerbate the continent ’ s energy crisis by raising energy demand . “ Our initial winter thinking favours a stormy pattern across most of continental Europe and heating demand near the 30-year normal ,” said William Henneberg of US forecaster Commodity Weather Group . This weather pattern generally favours normal wind and rain conditions , he added but winter temperatures could be lower if September- November turned out chillier than expected . JD
RWE to receive first LNG from Abu Dhabi in December German utility RWE will receive a first LNG delivery – 137,000 cubic metres – from Abu Dhabi in December and aims to further boost import volumes from next year . “ The cargo [ from the Abu
Dhabi National Oil Co ] is expected to be shipped from Das island and to arrive in Germany in late December 2022 ,” RWE said . “ Furthermore , the two companies have signed a memorandum of understanding on multi-year LNG supplies where cargoes will be delivered to Germany starting from 2023 ,” RWE added . The LNG should arrive at the floating storage and regasification unit in the northern town of Brunsbuettel , which is also expected to begin operation at the end of this year . CD
Germany won ’ t have functioning H2 market until 2035 – Aurora Germany needed until the mid- 2030s to create a functioning hydrogen market as it must ensure investment and create import infrastructure , said consulting firm Aurora Energy Research . “ We will start off with really local pricing of domestic hydrogen and will see hydrogen imports increasingly starting to come in from 2035 onwards ,” said Thekla von Bulow , co-head of Aurora ’ s central European consulting department . “ So , from then on there will be much more liquid trading and actually a pricing mechanism for hydrogen .” JD
Russian gas still key for Italy ’ s security of supply – experts Italian efforts to cut its reliance on Russian gas are succeeding but industry experts said the country cannot do without completely , at least until 2024 , to ensure security of supply .
“ When you go in the nitty-gritty of the logistics of the [ Italian ] gas market , you still have a constraint in terms of how much you can import from the south and bring to the north , so at the moment is unfeasible to completely [ replace ] Russian with Algerian [ gas ],” said Matteo Mazzoni , Icis director of energy analysis . “ To secure supply through winter and keep the lights on you need Russia to keep exporting even at minimum capacity ,” he said . A complete halt of those flows would have serious consequences on the overall balance in Italy , especially if the coming winter should see below average temperatures , he said . “ I don ’ t think Italy , or any other European country , is in a position where it can give up [ gas ] supplies from Russia in the short term ,” said Jacopo Casadei , gas analyst with consultancy Energy Aspects . ET
Italian steel sector warns of closures on power price crisis Italian steelmakers will struggle to stay open this winter if the EU does not limit and stabilise energy prices as increasing production costs have already forced some of them to reduce their operations , industry sources said . “ We need distinct European actions to regain competitiveness , without common European policies we would struggle ,” said Simone Campanella , head of manufacturer Duferco . The company had shut down one of its steel mills for eight weeks in mid-July – the longest stop ever undergone by the group – and adopted a new business model to assess daily whether energy prices would justify keeping the facilities operational . ET
Iberian price cap only shortterm solution – experts An Iberian cap on gas prices for electricity generation is only a “ short-term solution ” to tackle spiralling power prices , experts told Montel . “ In the short term , it is better than not having done anything . The net balance is that the [ wholesale power price ] is going down . But it is a short-term solution , not for the medium and long term ,” said Javier Revuelta , head of Afry in Spain . In anticipation of high energy prices lasting several months , new measures needed to be put in place to avoid extending the cap , he added . In mid-June , Spain and Portugal set the cap at an average of EUR 48.80 / MWh for the 12 months of application , which has reduced spot prices . Analyst Carlotta Piantieri of consulting firm Aurora Energy Research said the policy had been successful in reducing consumer prices but to a “ limited extent .” The measure had caused some ” spillover effects ”, she said , such as an increase in power exports to France and greater generation from gas-fired plants , at a time when it should be reduced given the current supply squeeze . BB , ET
Spain suspends LNG storage tender as capacity near full Spain suspended its LNG storage capacity auction for October and November as stocks were expected to reach 99 % by mid-October . Spain was filling stocks , like its EU neighbours , with the bloc targeting gas storage facilities to be at least 80 % full by 1 November to substitute missing Russian volumes . PB
Montel Magazine 3 – 2022