Spain is importing near-report levels of liquefied natural gas as determined heat boosts cooling demand and spends the quantity of water available for hydropower production.
With prices for the gas near their lowest in three years, merchants may also be betting on a restoration by filling up LNG storage sites in the country, which account for nearly a third of Europe’s full capacity. Shippers are continuing to purchase gas regardless of the tanks being full.
It’s another instance of how gas storage tanks are filling up throughout the continent to reach peak points way before heating demand kicks in. That leaves a bigger-than-ordinary buffer for potential shocks in the winter, increases trading alternatives for when prices rise and also raises questions about whether Europe can soak up all the gas that’s flowing in.
Spanish gas demand elevated 43% in the first 19 days of this month, compared with the same interval of last year. That’s partially due to above-regular temperatures this summer and hydropower reserves about 17% below their 10-year median.
Lower spot LNG costs allowed Spain to scale up fuel energy use, contributing to a substantial coal-to-gas shift, Fernandez Diaz said. Spanish consumers were additionally able to cut back the Algerian pipeline supply, which is connected to oil prices and is costlier, she mentioned.
To fulfill higher demand, 26 tankers are anticipated to empty in Spain this month, up from 16 in August 2018 and a record 30 in July. A lot of the rise was because of extra tankers from Russia, which has now seized a 6% share of Spain’s overall gas supply.