A too short cold snap to remind us what winter is all about

As expected, EU electricity generation was down 3% in 2023, reaching a record low since 2015.

EU public net electricity generation

Sources: Energy-Charts.info, thierrybros.com

EU gas demand 2021-2023 

Sources: EI Statistical Review for historical data, thierrybros.com

As expected, power generation could be the single biggest cause of gas demand destruction in the EU in 2023 (expected at -9% after -14% in 2022 vs 2021).

Norway production for 2023 was both 5.3% down vs 2022 and 4.8% down on the Norwegian Offshore Directorate’s own forecast showing that Norway’s help to balance EU gas market after the weaponisation of Russian gas is fading when prices are reverting from record high.

Norway Production 

Sources: Norwegian Offshore Directorate, thierrybros.com

By pausing on 26 January non-Free Trade Agreement countries (FTA) authorisations for US LNG until after the next election, the Biden Administration is delivering a domestic agenda that pleases both greens and voters that want cheap US gas! Non-FTA countries non-US allies like China and India will focus on their domestic coal to get affordable energy. And Russia could be tempted to boost its LNG & coal exports to the Global South. Non-FTA countries and US allies like Europe, Japan and South Korea won't be able to complain as they believe their respective gas demand should go down.

With 2.3 bcm exported in January 2024 vs 1.7 bcm exported in January 2023, for a fifth month in a row Gazprom’s exports to Europe are up y-o-y (+40%). 

Gazprom’s Europe Monthly Exports  

Sources: Entsog, thierrybros.com

We should continue to witness Russian pipe flows to move in the expected narrow range between 0.9 bcm and 2.4 bcm/month.

Split of Gazprom’s Europe Monthly Exports 

Sources: Gazprom, GTSOU, Entsog, thierrybros.com

Since July 2023, LNG send-out is down y-o-y as Asia is back on the LNG market.

EU (excl. Malta) LNG send-out  

Source: GIE, thierrybros.com

After moving on 5 December 2023 back into its historical range, EU gas storage moved below a year ago on 9 January 2024 due to a short-lived cold spell. But the return of mild winter and on-going anaemic industrial and power demand are pushing up the 2024 storage curve closer to the 2023 records. With storage 70% full at the end of January, this leaves plenty of flexibility for managing potential cold waves and most supply disruptions for the rest of winter.

EU storage 

Source: GIE, thierrybros.com

Dr. Thierry Bros

Energy Expert & Professor

February 1, 2024