London (Platts)--28 Nov 2017 954 am EST/1454 GMT
Natural gas exports from the Netherlands to Belgium and Germany combined rose sharply on Monday's gas day to edge close to the high seen during the previous winter-delivery period, data from Platts Analytics' Eclipse Energy showed Tuesday.
The Netherlands exported a total of 163 million cu m of gas to Belgium and Germany combined at the beginning of the week, the highest figure for a gas day since January 23 and only marginally shy of the Winter 2016-17 high of 170 million cu m from January 18.
Exports were split between Belgium at 87 million cu m -- the highest export figure since mid-February -- and Germany at 76 million cu m -- the highest export figure since late January.
Gas exports from the Netherlands have risen steeply from the levels seen during the first month of the winter-delivery period, where net Dutch exports to Belgium averaged 17 million cu m/d, where net exports to Germany have risen at a slower rate after having averaged 42 million cu m/d during October.
Belgium has received the majority of the Dutch gas export increase in recent weeks, with the UK-Belgium Interconnector flipping into export mode allied to firm demand for Dutch gas from France -- Belgium exported 16 million cu m to the UK and 60 million cu m to France during Monday's gas day.
L-CAL GAS EXPORTS REMAIN STRONG
L-cal gas exports from the Netherlands to neighboring countries have remained firm despite the weaker production seen from the giant Groningen L-cal gas field in recent years.
Indeed, Dutch L-cal gas exports are on course to set a new record for a calendar year so far this decade with a total of 24.788 Bcm having been exported to Belgium and Germany combined so far this year, up 8% on the January 1-November 27, 2016, period and already well above the 22.816 Bcm total for the whole of 2015.
During the first month of the Winter 2017-18 delivery period, production at Groningen came in at 1.78 Bcm, according to data from operator NAM, compared with Dutch domestic L-cal demand of 1.514 Bcm and L-cal gas exports of 2.140 Bcm during October.
This has been managed by an increase in H-cal gas to L-cal gas conversion in the Netherlands, done by adding nitrogen to H-cal gas.
According to data from Gasunie, the amount of H-cal gas used to be converted into L-cal gas during the first ten months of the year was 25% higher on an annual basis at 12.587 Bcm and already well above the 8.783 Bcm total for the whole of 2015.
H-CAL EXPORTS UNDER PRESSURE IN Q1
With the Netherlands-UK BBL pipeline set to be incorporated into the TTF area from January 1 onwards, reducing transit costs, and flows from Belgium to the UK expected to rise on more economical ZEE/NBP price spreads in the coming months, H-cal supply to Germany could come under pressure at the beginning of 2018.
With high Russian flows into Germany expected to continue for the remainder of the Winter 2017-18 delivery period and robust storage levels due to large net injections seen in October, pricing on the German hubs is set to be lower than other European hubs during the first quarter of next year.
Indeed, the GASPOOL Q1 18 contract was assessed by S&P Global Platts at Eur20.30/MWh on Monday, 25 euro cent lower than the TTF equivalent and Eur1.981/MWh shy of the NBP price for the same period.
Moreover, the NetConnect Germany Q1 18 contract was assessed at Eur20.725/MWh, 40 euro cent below the PEG Nord equivalent and 51.5 euro cent shy of the Zeebrugge Beach peer, further indicating that on a pure price basis, Dutch H-cal gas exports look set to be moved west rather than east.
