By TARA PATEL
France urgently needs to import liquefied natural gas to the
southern port of Fos after prices in the region rose to a
record, the energy regulator and gas distributor said.
As heating demand climbs amid cold weather, the difference in
gas prices between the southern and northern French markets
has widened to a record, the regulator Commission de
Regulation de lEnergie said in a statement. The gap is
a result of lower LNG supplies from Algeria and traders
preferring to send shipments to Asia, where prices have
risen, it said.
Frances energy regulator has warned of risks of tight
supply in the south of the country, where prices were already
pushed higher last year due to lower LNG imports and
bottlenecks in getting piped gas from the north.
GRTgaz SA, the French gas pipeline operator controlled by GDF
Suez SA, was to raise capacity on its north-south link in a
bid to prevent price surges and volatility under a plan
announced earlier this year.
The gas market in southern France is facing major
tension at the start of winter, CRE said in its
statement. High volatility and low visibility
about how or when supply constraints will end are affecting
the southern market, it said.
Supply shortages in the southern French market, known as
Point dEchange de Gaz Sud, or PEG Sud, pushed the
difference in day-ahead gas prices with its northern
counterpart PEG Nord to a record 12.29 euros ($16.80) a
megawatt-hour on Dec. 3, the regulator said in its latest
statement. The month-ahead differential was 6.24 euros a
megawatt-hour, it said.
LNG imports to the Fos ports must be increased
quickly to limit use of stored natural gas that
may be needed later in the season, GRTgaz said on its website
last month. More imports are also needed at Montoir in
western France to prevent trade imbalances with eastern
regions supplied by ports such as Dunkirk.
Gas storage in the PEG Sud hub was 76% full, down from 82% a
week earlier, according to data from Gas Infrastructure Europe
compiled by Bloomberg.
LNG prices have risen significantly in the past
weeks in Asia to the detriment of imports coming to the Europe
an market, the regulator
said in its latest statement.
LNG for delivery to northeast Asia was unchanged at $19/MMBtu
this week after 12 weeks of gains, according to assessments
by World Gas Intelligence of cargoes for delivery in four to
eight weeks. That compares with $13.80 in southwest Europe
at the Algerian Port
of Skikda has also lowered imports to Mediterranean ports in
France and Spain, including Fos Cavaou and Fos Tonkin near
Marseille, the CRE said. Its unknown when
the infrastructure will function normally.