On September 2, Gazprom said that due to multiple equipment failures, the "Beixi No. 1" natural gas pipeline will completely stop gas transmission until the fault is solved.
calculates the impact of the suspension of operations on European natural gas supply. In 2021, Europe imported 155 billion cubic meters of natural gas from Russia, accounting for about 45% of Europe's natural gas imports in 2021 and nearly 40% of its total natural gas consumption. As of the end of July 2022, Russia's proportion of natural gas supply in Europe had dropped to 4.3%. Before the suspension of Nord Stream 1, it accounted for 31.4% of Russia's total pipeline gas supply to Europe, that is, the suspension of Nord Stream 1 will reduce the supply of natural gas in Europe by 1.34%.
Oriental Fund Research Department believes that although
accounts for a small absolute proportion, it has a great impact. On the one hand, higher natural gas prices continued to suppress demand, and industrial natural gas continued to decline. IEA data shows that more than 40% of the raw materials in the European chemical industry come from natural gas, and more than one-third of the energy used in the production process also comes from natural gas; on the other hand, the decline in European imports to Russia will bring about an increase in LNG imports, and global natural gas is still tight. Since the beginning of the year, the increase in imports of European LNG has mainly been due to the decline in imports from China and South Asia; winter is the peak season for natural gas consumption, and the competition between Europe and Asian countries for LNG will be intensified due to the supply cut of Nord Stream 1.
Europe means that winter natural gas reserves can meet demand, but they must be based on three assumptions. First, the FSRUs of various countries will be successfully put into use before the end of the year, and Europe has the ability to import more LNG; second, Europe recommends that member countries voluntarily adjust and reduce demand, and member countries will implement the reduction of industrial, commercial and residential needs; third, weather factors, the winter temperature is not much different from previous years. If all can be cashed out, Europe's full gas storage + newly imported LNG may meet the needs of the entire winter, and the gas storage is expected to bottom out by the end of March next year.
corresponds to investment. Maintaining gas prices at high levels brings potential investment opportunities. It is recommended to pay attention to natural gas wholesale and retail companies; on the other hand, transportation demand brought by LNG incremental demand has been beneficial to LNG shipping.
(The market is risky, investment should be cautious.)
