Gas demand falls amid Russian squeeze: Engie

Bloomberg

Engie SA Chief Executive Officer (CEO) Catherine MacGregor said the French utility’s clients are cutting natural gas consumption as prices soar amid Russia’s squeeze on fuel deliveries to Europe.
“Gas demand has declined among our customers, whether its households, small businesses or large manufacturers,” MacGregor said on a conference call on Friday. That’s probably the result of energy savings, a switch to other fuels, and of the “price signal,” especially among large firms, she said.
Purchases by small companies and consumers fall at about mid-single digit rates over the first half, Chief Financial Officer Pierre-Francois Riolacci said. Industrial companies cut their consumption at a low double-digit rate, he added.
European nations are scrambling to reduce gas consumption and find alternative suppliers and energies amid fears Russia will bring deliveries to a complete halt. The squeeze has already sent gas prices to records, hurting households and businesses, and forcing governments in the region to spend tens of billions of euros on supporting their economies.
Engie has substantially reduced its exposure to volumes procured from Russian gas giant Gazprom PJSC for the coming winter, the company said in its first-half earnings statement on Friday. Residual volumes, which represent about 4% of the company’s European requirements for supplying both its customers and its own gas-fired power plants, “are now well within the normal range of volatility that the group manages on an ongoing basis,” it said.
For the winter of 2023-24, the utility said it’s confident that additional volumes contracted through new supply sources including liquefied natural gas.
, together with an expected decrease in demand, will help replace the need for Russian volumes. Required storage levels could be reached even if Russian flows were fully halted.

The recent decline in consumption shows there’s a “certain flexibility on the demand side,” MacGregor said. “If Russia were to halt deliveries, we would be completely able to absorb this remaining 4% on the basis of our portfolio.”