Dutch and British wholesale gas prices mostly rose this morning on news of a delayed restart of the Freeport liquefied natural gas (LNG) terminal and higher demand.
The Dutch contract for September delivery, a European benchmark, rose by €9 to €269 per megawatt hour (MWh) while the first quarter 2023 contract was €6 higher at €271 per MWh.
"Prices are up this morning, probably supported by the announcement yesterday evening of the delayed restart of the US Freeport LNG plant," analysts at Engie EneryScan said in a daily note.
Freeport LNG has delayed to late November from October the planned start-up of the plant, which can export up to 15 million tonnes per annum (MTPA) and has been offline since June after a fire.
Full operation is now expected in March.
"It is not good news for Europe, which has been relying increasingly on LNG to make up for the shortfall in Russian supply," analysts at ING bank said in a note.
Russian pipeline gas supplies to Europe have dropped off by around 75% this year, impacted by a tug of war over European sanctions on Moscow over its invasion of Ukraine.
Russia will halt natural gas supplies to Europe via the Nord Stream 1 pipeline for three days from August 31 to September 2, piling pressure on the region as it seeks to refuel ahead of winter.
Nord Stream 1 flows have been curtailed at just 20% of capacity, with Russian supplies seen stable at historically low levels today.
Europe's gas storage sites were 77.7% full, getting close to a European Commission target of 80% by October 1.
"With Russian gas flows wreaking havoc on the gas market, Europe would be foolish to be lulled into a false sense of security with Russian flows," Rystad Energy Lu Ming Pang said in a report.
In Britain, the contract for immediate delivery was flat at 450 pence per therm while the contract for next day delivery was up 40 pence at 450 pence per therm.
An additional outage at Norway's Kollsnes gas processing plant was one bullish factor, as well as overall more demand for North Sea gas, analysts at Refinitiv said.
The UK system was under-supplied by around 3.6 million cubicmetres (mcm). Peak wind generation in Britain was seen around 5.2 gigawatts (GW) today and 4.7 GW tomorrow, out of a total metered capacity of nearly 20 GW, Elexon data showed.
