Europe is unlikely to refill its natural gas storage facilities to even 80% before winter, Equinor CEO Anders Opedal said on Wednesday, Reuters reported, raising the prospect that the continent will enter the heating season with its smallest supply buffer in years.
European gas storage sites are currently about 54% full, the second-lowest level for this point in the year in 15 years and well below the five-year average, according to Equinor and Gas Infrastructure Europe data. Earlier this month, the European Union’s energy regulator ACER said storage levels stood at just 28% at the start of the summer injection season, below the levels recorded at the start of the previous three summer seasons, after a colder winter left inventories significantly depleted.
The warning comes as Europe enters the final months of the summer injection season with fewer LNG cargoes available than expected. Asian buyers are absorbing an increasing share of spot cargoes after the U.S.-Iran war disrupted shipments through the Strait of Hormuz, leaving European utilities bidding against higher-priced demand for replacement supplies.
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Norway now supplies roughly one-third of Europe’s gas imports, leaving Equinor with an unusually clear view of the continent’s winter supply outlook. The company also estimates LNG now accounts for about 30% of Europe’s gas imports, exposing the refill campaign to intensifying competition for cargoes from Asia.
In the meantime, competition for LNG has intensified across Asia. Japan’s wholesale electricity prices have climbed to their highest level in three and a half years, Pakistan is paying record prices for spot LNG cargoes, and India has accelerated long-term LNG contracting as buyers compete for supplies displaced by the disruption in the Gulf.
Asia is steadily pulling LNG cargoes away from Europe. Kpler estimates Asian LNG imports will climb to a six-month high in July, led by a sharp recovery in Chinese demand, while Europe’s LNG imports are projected to fall to their lowest level since September 2024. U.S. cargoes that typically replenish European storage are increasingly sailing to Asia instead as buyers there pay higher prices.
By Michael Kern for Oilprice.com
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