We expect higher European gas imports of Russian gas in summer 2015 on the back of low European gas inventories and falling gas prices (see our latest edition of Natural Gas Insight: West of Suez).

  • European underground storage facilities saw large stock draws in Q1 2015, with inventory levels falling well below the 5-year average. This comes on the back of higher natural gas demand due to colder weather in Q1, while European domestic supply suffered a series of setbacks: Norwegian fields saw unexpected outages, the largest Dutch gas field Groningen registered lowest production over Jan-Mar, and Ukrainian production is also falling.
  • Low European gas inventory levels mean there will be higher injection requirements during May-Sept, primarily resulting in higher import nominations for Russian gas.
  • We see Europe importing some 73 bcm of Russian gas over May-Sept, which would be an uptick of 3% y-o-y, with some risk to the downside in case of lower-than-expected European gas demand and/or higher LNG imports.