The butterfly effect

- After a mild winter last year in Europe, the new heating season has started with a bang. EU+UK gas inventories have drawn at the fastest rate in 15 years since October for that time of year (except for Oct-Nov 2016). Things could get a lot worse from here.
- On the demand side, Europe has already suffered multiple cold spells and low wind speeds since the start of winter. La Niña’s return means a strong chance of colder weather for the rest of the season than last year.
- On the supply side, concerns over what’s left of Russian gas flows to Europe are rising.
- Plummeting gas inventories mean Europe will depend on a repeat of last year’s scenario, when there were few unplanned outages at LNG plants globally. Kayrros analysis shows last winter was a clear outlier.
- Q2/Q3 EU gas prices have already risen on market concerns over low end-winter storage levels and difficulties in rebuilding summer stocks. A return to a more typical outage pattern could send front prices flying and further heighten Q2/Q3 concerns.

Ship-to-ship transfers happened off Kildin Island, Russia on Nov 18, Nov 27 and Dec 2 2024.
These direct ship-to-ship transfers resumed as Novatek was barred from using two floating LNG storage units it had set up to transfer LNG due to mounting Western sanctions. Those two logistics pieces are located in Kildin Strait and Kamchatka and were key to maintaining the availability of ice class LNG carriers.

The low level of global LNG unplanned outages during winter 2023-24 was an outlier, adding to unseasonably warm winter weather to ease the tensions on the gas market.
Winter LNG supply outages vary significantly from year to year, with nearly twice as many outages in 2020-21 as in 2023-24.
Kayrros data offers a realtime view of unplanned LNG outages at critical times, along with over 10 years of historical data to analyse outage patterns.
December 2024 started with an outage at Bonny Island Train 3 that is likely unplanned.

Northwest Europe has experienced a colder start to the winter this year, with the return of La Niña, after two years of exceptionally mild winters.
La Niña is generally associated with colder-than-normal temperatures in western Europe.
The ECMWF long range forecast shows a mean temperature scenario closer to historical averages for the 2024-25 winter than the previous two winters.
As a result, gas inventories in Europe are forecast to deplete faster than the previous two winters, creating significant LNG demand to refill storage during summer 2025.

Europe’s winter gas supplies are at risk from market disruptions as it relies more on LNG (FT).
Europe’s industry is at risk of a new shock this winter as gas prices rise (Reuters).
German gas-fired generation saw its largest ever monthly rise in November due to slow wind (Reuters).
Google DeepMind hits a milestone in medium range AI weather forecasting (FT).

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