Europe’s benchmark natural gas prices edged higher on Thursday as Norway, the continent’s largest gas supplier, began its annual maintenance on critical gas infrastructure.
The maintenance work, which started this week at Norway’s Kollsnes gas processing plant, is limiting pipeline flows to Europe. This plant plays a crucial role in processing gas before it reaches European markets.
Since Russia halted pipeline gas deliveries to most EU countries following its invasion of Ukraine three years ago, Norway has emerged as Europe’s largest gas supplier, now accounting for about one-third of the continent’s gas imports.
The annual summer maintenance traditionally reduces supply, prompting Europe to increase imports of liquefied natural gas (LNG) to meet its storage targets ahead of winter.
Following a harsh 2024/2025 winter that depleted gas stocks below the five-year average, Europe faces pressure to replenish its storage during the summer months to ensure sufficient supply in the colder season.
In response, the European Union has introduced greater flexibility to its gas storage rules earlier this year, extending the deadline for countries to achieve 90% storage capacity before winter and allowing a 10% deviation from this target.
Meanwhile, weaker LNG demand in Asia, including China, is currently easing competition for spot LNG cargoes, benefiting European buyers.
Market participants will closely monitor Europe’s storage refill progress, LNG demand trends in Asia, and whether rising North Asian consumption during the peak summer power season might drive up global LNG prices. Increased Asian demand could compel Europe to pay higher prices to secure gas supplies for the coming winter.
