(Montel) European gas storage sites should average around 50-55% of capacity by April when injections start to increase ahead of next winter, said the head of Italian TSO Snam.
“That means that the total volumes that need to be injected during summer will be half the amount of last year,” said Stefano Venier during the company’s 2022 earnings presentation.
“We’ve overcome this winter successfully, not only because of the mild weather, but also because of all the initiatives that were put in place,” he said, regarding national and EU-wide efforts to find alternatives to Russian gas.
“This is providing an advantage for next summer as we prepare for next winter.”
Current EU gas storage levels stood at 56%, according to data from Gas Infrastructure Europe.
Prices to hold
Venier expected gas prices to hold around current levels, with seasonal contract spreads inducing the market to fill storage ahead of next winter.
The front month-contract on the Dutch TTF hub was last seen around EUR 42.25/MWh, while the summer and winter contracts were trading at EUR 43.08/MWh and EUR 50.15/MWh, respectively.
Snam’s CEO also said efforts to receive additional volumes of LNG were on track with Germany already connecting three floating storage and regasification units (FSRUs) and Italy’s first FSRU expected to become operational in mid-May.
Nevertheless, he said, the outlook for gas supply also hinged on uncertain factors, such as the weather next winter and competition for LNG from Asia as China’s economy rebounds from Covid-related restrictions.
Italian 2023 consumption
As for Italy, Venier expected gas consumption to hover around 68-70bcm in 2023. That compared with almost 69bcm last year when annual demand dropped 9% due to mild weather and industrial production curbs owing to high prices.
Also, he expected voluntary efforts to curb gas consumption would continue for the remainder of the year following the sharp cuts in supplies from Russia last year in the wake of its invasion of Ukraine.
EU nations agreed to voluntarily reduce their natural gas usage from last August to the end of March this year in a bid to increase gas storage levels.
Gas consumption would progressively recover in 2024 as some of those initiatives to discourage demand would be curtailed, said Venier.
“We’ve overcome this winter successfully, not only because of the mild weather, but also because of all the initiatives that were put in place,” he said, regarding national and EU-wide efforts to find alternatives to Russian gas.
“This is providing an advantage for next summer as we prepare for next winter.”
Current EU gas storage levels stood at 56%, according to data from Gas Infrastructure Europe.
Prices to hold
Venier expected gas prices to hold around current levels, with seasonal contract spreads inducing the market to fill storage ahead of next winter.
The front month-contract on the Dutch TTF hub was last seen around EUR 42.25/MWh, while the summer and winter contracts were trading at EUR 43.08/MWh and EUR 50.15/MWh, respectively.
Snam’s CEO also said efforts to receive additional volumes of LNG were on track with Germany already connecting three floating storage and regasification units (FSRUs) and Italy’s first FSRU expected to become operational in mid-May.
Nevertheless, he said, the outlook for gas supply also hinged on uncertain factors, such as the weather next winter and competition for LNG from Asia as China’s economy rebounds from Covid-related restrictions.
Italian 2023 consumption
As for Italy, Venier expected gas consumption to hover around 68-70bcm in 2023. That compared with almost 69bcm last year when annual demand dropped 9% due to mild weather and industrial production curbs owing to high prices.
Also, he expected voluntary efforts to curb gas consumption would continue for the remainder of the year following the sharp cuts in supplies from Russia last year in the wake of its invasion of Ukraine.
EU nations agreed to voluntarily reduce their natural gas usage from last August to the end of March this year in a bid to increase gas storage levels.
Gas consumption would progressively recover in 2024 as some of those initiatives to discourage demand would be curtailed, said Venier.
