Norway outage pushes European gas prices to highest this year
6/3/2024
Norway's gas exports to Europe fell sharply on Monday as a shutdown of the offshore Sleipner hub halted operations at the Nyhamna onshore processing plant, pipeline operator Gassco said, lifting European prices to their highest level this year.
The outage was caused by a crack discovered in a two-inch pipeline onboard Norway's offshore Sleipner Riser platform, the company said. It was not yet known how long this will take to repair, but the situation is not considered dangerous, it added.
"This has big consequences from a supply perspective," Alfred Hansen, head of pipeline system operations at Gassco, told Reuters. The outage at the Equinor-operated Sleipner platform, which began late on Sunday, was set to continue on Tuesday, according to Gassco. "The field operator will give us a more accurate estimate for how long it could take to repair, and we will then update our forecasts accordingly," Hansen said.
Norway in 2022 overtook Russia as Europe's biggest gas supplier after Moscow's invasion of Ukraine severed decades-long energy ties. Sleipner Riser is a connection point for the Langeled North and Langeled South pipelines connecting the Nyhamna plant on Norway's west coast with the Easington terminal in northeast England.
Both terminals were shut on Monday, transparency data showed, with Norwegian gas supply nominations falling to 256 MMm3/d, from 300 MMm3/d nominated on Friday, according to Gassco data.
While options exist for bypassing Sleipner, this is time-consuming and not without risk, Hansen said. Europe's benchmark gas price, the Dutch front-month contract , was up 7.2% at 37.08 euros/MWh by 1322 GMT, easing from an earlier peak of 38.56 euros, its highest level since early December.
Gassco is working with Equinor to resolve the situation, a Gassco spokesperson said separately. "We are working... with a plan for repairs and with a plan for compensatory measures to deliver the highest possible volume to Europe," the spokesperson said.
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