Equinor: Europe will not reach the 80% target for pre-winter storage of gas
Europe will have a difficult time replenishing its depleted 'gas storage sites, to the 80% target before next winter. This is due to unfavourable price spreads, and lower than expected supply.
On a conference call with analysts, Torgrim Reitan, the Chief Financial Officer, said that European gas storage facilities are around 30% full. This is six percentage points lower than the seasonal average.
The CFO said that the current market conditions, in which contracts for the near future are more expensive than those for the next winter, do not provide the incentive to invest in the short term.
"We believe that the gas storages are unlikely to reach 80% of the target set. Reitan explained that the European gas market will be more vulnerable in the future to weather conditions and operational problems.
The Middle East War has damaged Qatari LNG production. It could take five years to repair, reducing Qatar's exports by 17%.
Reitan added that Europe must buy LNG in order to meet its needs.
He added that the damage meant "gas markets will take much longer" to return to normal, even though oil markets may be able to do so within a half-year of the Strait of Hormuz being reopened.
The?CFO was speaking after Equinor'reported its first quarter earnings. This was boosted by the high production and the rising oil and natural gas prices following the U.S. Iran war. Reporting by Nora Buli and editing by Terje Solsvik
(source: Reuters)
