• Natural Gas News

    Gazprom to slash gas supply to France's Engie next month

Summary

Engie says it has enough gas in storage to meet customer needs and technical requirements.

by: NGW

Posted in:

Complimentary, NGW News Alert, Natural Gas & LNG News, Europe, Top Stories, Corporate, Contracts and tenders, Market News, News By Country, France

Gazprom to slash gas supply to France's Engie next month

Russia's Gazprom has informed France's Engie it will reduce gas deliveries on September 1 because of a disagreement over some contracts, the latter company said in a statement to various media on August 30.

Engie said it had stocked up enough gas to meet customer demand and technical requirements, and had put in place a number of measures to limit any financial and physical impact from the loss of supply. Data published by Gas Infrastructure Europe shows that France had filled its gas storage facilities to 91.5% of capacity as of August 28. This means the country has sufficient gas in storage to cover approximately a quarter of its annual consumption.

Russia has already cut gas supply to France significantly since it began its war in Ukraine, particularly since June, when Gazprom started reducing gas flow via the Nord Stream 1 pipeline. Nord Stream 1 is now running at only 20% of its 55bn m3/year capacity, and is due to close completely for three days of maintenance from August 31, and there are fears the pipeline may not return to operation afterwards.

France does not rely greatly on Russian gas compared with some of its neighbours, using it to cover only about 17% of annual consumption. According to Reuters, Engie said on August 29 it was discussing an increase in imports from Algeria's Sonatrach. But pipeline constraints limit how much North African gas France can access.

European gas prices slumped significantly on August 29 from record highs at the end of last week, on news that Germany is stocking up on gas faster than planned. Economy minister Robert Habeck said on August 28 that gas storage facilities were expected to be filled to 85% of capacity next month in preparation for winter.

The TTF September contract fell to €276/MWh ($2,947/'000 m3) on August 29, down from a peak of €339/MWh. As of 07:50 GMT on August 30, the contract is trading at €276/MWh.