Why Russia and USA are at odds
3. First natural gas imports from U.S.
Another reason why natural gas prices in Europe are bound to remain subdued is the planned supply of U.S LNG to Europe. In an article on Oilprice.com on July 29, it was revealed that Houston-based Cheniere Energy is looking to supply European customers as of December 2015. Cheniere also plans to deploy a floating regasification terminal off the Croatian coast in order to supply Central and Eastern European countries. Even though Cheniere has admitted that its goal is not to ‘squeeze out’ the Russians, it is clear that the company aims for Russian market share in Eastern Europe.
4. Full storage
A massive production decline in Europe’s largest natural gas field in Groningen, located in the north of the Netherlands could not stop European natural gas prices from sinking further. Natural gas imports from Russia, Norway and Qatar provided too much counterweight to lower Dutch output. On October 2, Russia’s Gazprom reported a 23 percent year-on-year increase on exports to Europe of which most went to Germany (a 19 percent increase to 11.2 bcm) and Italy (a 6 percent increase to 7 bcm), and also Norway and Qatar have contributed to filling European storage sites. Currently, Europe is filling its natural gas stockpiles at the fastest rate since 2009. Full natural gas storage sites will slow the potential rebound of natural gas prices, as it will put a dampener on demand in the near future.
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