The boss of Norway’s state-backed vitality firm has mentioned European gasoline provides are “in a significantly better place” in contrast with final yr, including that repairs to its platforms won’t interrupt provides this winter.
Equinor, which has grow to be Europe’s largest supply of pure gasoline after Russia halted most of its gasoline provides to the continent following its invasion of Ukraine, on Friday lowered its outlook for annual manufacturing development from 3 per cent to 1.5 per cent due to upkeep on its gasoline and oilfields in the course of the summer time.
However Anders Opedal, the corporate’s chief government, mentioned the work had now been accomplished, enabling manufacturing to ramp up forward of the essential winter heating season.
“We’re again in regular manufacturing,” he added. “We don’t see any read-over from this occasion on provides. Our focus will likely be to ensure we have now excessive manufacturing at our services.”
The feedback ought to present a level of reassurance to gasoline markets, the place costs have jumped in current months because of nervousness in regards to the battle between Israel and Hamas, strikes at a Chevron liquefied pure gasoline plant in Australia and attainable sabotage of a gasoline pipeline between Finland and Estonia.
Futures contracts monitoring Dutch gasoline, the benchmark for world gasoline costs traded at €51.24 per megawatt hour on Friday, effectively beneath the height of €311 reached in August 2022 after Russia invaded Ukraine however double the current low of €25 on the finish of July.
“It’s a nervous market. Incidents and occasions all over the world do affect the European gasoline market and we count on volatility however Europe is in a significantly better place [than last winter],” Opedal mentioned.
Whereas Equinor, which supplies 29 per cent of the UK’s pure gasoline, will proceed to spice up provides, Opedal mentioned Europe remained a “scarce market”. “We are going to produce as a lot gasoline as attainable however Europe additionally has to draw liquefied pure gasoline into the market,” he added.
To bolster vitality safety, international locations have struck long-term offers for LNG, with firms in France, the Netherlands and Italy all saying offers this month with Qatar to ensure 27 years of provide.
Europe has additionally topped up gasoline storage, with the EU reaching a goal of filling storage services to 90 per cent of capability in August, two-and-a-half months forward of a November deadline.
Nonetheless, analysts warn that Europe isn’t utterly out of the woods, with gasoline storage alone not ample to fulfill winter demand. Europe “stays finely balanced for this winter” and any unplanned massive outage at a key piece of infrastructure or provide disruption “would take a look at the gasoline system’s resilience”, mentioned Natasha Fielding, head of European gasoline pricing at Argus, a value reporting company.
“If one thing occurred to quickly tighten the worldwide LNG market, similar to a shutdown at a big LNG export plant, and each Europe and Asia acquired right into a tug of battle for obtainable LNG provides, then European gasoline costs might spike once more,” she added.
Francesco Gattei, chief monetary officer of Italian vitality firm Eni, mentioned he had been “fairly positively stunned” by the corporate’s potential to shortly wean itself off Russian gasoline. Eni additionally reported outcomes on Friday, saying its adjusted revenue earlier than taxation fell 47 per cent to €3.3bn within the three months to 30 September, beating analysts’ estimates.
Equinor’s internet working earnings earlier than taxation was $7.5bn within the third quarter, down 71 per cent from $26.1bn in the identical interval final yr, and barely beneath the $9.6bn reported in 2021, additionally forward of analysts’ forecasts.
Each Eni and Equinor count on costs to stay increased than earlier than the Ukraine battle for a while, bolstering earnings within the years forward however growing scrutiny of the business, which has confronted a collection of windfall taxes.
Extra reporting by Shotaro Tani