European gas set for 3rd weekly gain as supply worries deepen

Bloomberg

Natural gas prices in Europe headed for the longest streak of weekly gains this year as a prolonged shutdown of a key export facility in the US further tightens a market that’s already reeling from Moscow’s supply cuts.
Benchmark futures rose as much as 6.1% to advance for a third week. The Freeport LNG project now plans to resume partial operations in October, a month later than previously expected. It’ll put further strain on European companies and governments to secure enough supply to fill storage sites in time for winter, while continuing to fight off the risk of the blackouts.
“The extension of the outage yet again at Freeport will be a key blow for Europe, as securing supply for the winter” will be much harder, said Tom Marzec-Manser, head of gas analytics at ICIS in London. “As the outage length edges toward winter there will be increased concern about further extensions just as European demand begins to firm.”
Europe has been in the middle of an energy crisis for months, which is playing a huge part in slowing down economic growth and driving up inflation. Russia has reduced shipments through a major pipeline by 60%, and the link is scheduled for a full shutdown this month for maintenance. Germany has raised doubts that the Nord Stream will resume supply following the works.
Dutch front-month gas futures, the European benchmark, were 2.3% higher at 147.90 euros per megawatt-hour as of 12:38 p.m. in Amsterdam. They earlier rose to the highest intraday level since March 10. The UK equivalent increased 1.1%.
US liquefied natural gas (LNG) has taken on an increasingly important role in Europe, helping fill some of the gap left my Moscow’s cuts. For the first time, the US last month supplied more gas to Europe than Russia sends by pipelines, according to the International Energy Agency.
The Freeport facility in Texas was shut in early June following an explosion. The project makes up about 15% of all US exports of the fuel, including to Europe. Before normal operations can resume at the facility, Freeport must take a series of corrective actions and provide weekly updates, according to a federal notice. Full production is likely only by the end of the year, the project’s operator said.
The supply risks are spreading through the European economy and putting increasing stress on traders and utilities by boosting their funding requirements. German energy giant Uniper SE is seeking a bailout from the government as it has been forced to buy more expensive gas from the spot market to make up for shortfall from Russia.