Power Outage Could Reduce Norway’s Gas Supply to Europe Again

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Power Outage Could Reduce Norway’s Gas Supply to Europe Again

The Nyhamna plant in Norway is unavailable for natural gas processing due to a power outage with an uncertain duration at the onshore facility, data from Norwegian gas system operator Gassco showed early on Tuesday afternoon local time.

A total of 33.8 million cubic meters (mcm) out of the plant’s 79.8 mcm of technical capacity were not available as of 3 p.m. local time, with early Wednesday morning provisionally indicated as the end of the outage.

The outage comes after the Nyhamna plant was offline for several days in early June after the Sleipner hub offshore Norway was shut down.

The Sleipner Riser offshore hub is a connection point for pipelines connecting the Nyhamna plant on the west coast of Norway with the Easington terminal in the UK.

The unplanned outage highlighted the vulnerability of Europe relying on natural gas imports as Norway became Europe’s top gas supplier after the Russian invasion of Ukraine and the slump in Russian gas exports to the EU.

The Sleipner hub outage sent the Dutch TTF Natural Gas Futures, the benchmark for Europe’s gas trading, surging by 10% on a single day on June 3, to the highest level in six months.

The repair work on Sleipner Riser has been completed, Gassco said on June 7, and flows to the Easington terminal in the UK were restored.

Supply risks continue to pressure upward European benchmark gas prices, which have already jumped on two occasions this month as the market feared supply shocks.

One was the result of the Sleipner Riser outage, and the other was a 3% increase in the middle of last week, after German energy giant Uniper terminated its Russian gas supply contracts, leaving the market concerned about the remaining flows of gas from Russia to Europe.

The announcement from Uniper and the recent warning from OMV that Gazprom could halt gas supply to Austria due to a foreign court ruling that could interrupt OMV payments to Gazprom Export, rekindled concerns about whether Russian supply would be further limited by Gazprom.

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