Norway Gas Export Outage Prolonged, Impacts European Prices

An extended outage of the Langeled pipeline due to a crack onboard Equinor's Sleipner Riser platform has delayed repairs and increased European gas prices. As Norway has become Europe's largest gas supplier after Russia's invasion of Ukraine, supply disruptions trigger price volatility. Supply pressures heighten with competition from Asia for LNG.

An outage of Norway's gas exports to Britain via the Langeled pipeline was extended by two days until the morning of June 7 as repair work continued, Norwegian system operator Gassco said on Tuesday.

The outage, which Gassco attributed to a crack in a two-inch pipeline onboard Equinor's offshore Sleipner Riser platform, on Monday drove up gas prices in Europe, the United States and beyond. The overall duration of the outage, which began late on Sunday, remains uncertain, according to a message posted on Gassco's transparency website.

Norway in 2022 overtook Russia as Europe's biggest gas supplier after Moscow's invasion of Ukraine, making any outages at Norwegian fields a possible trigger for higher prices. Sleipner Riser is a connection point for the Langeled North and Langeled South pipelines connecting the Nyhamna plant on Norway's west coast with the Easington terminal in northeast England.

The outage on Monday lifted European gas prices to their highest since December on concerns it could tighten supply at a time of worries over remaining Russian volumes and an Asian heatwave increasing competition for liquefied natural gas (LNG). Norwegian gas supply nominations rose marginally to 264 million cubic metres (mcm) per day on Tuesday, from 256 mcm/day nominated on Monday, according to Gassco data but were still well below the 300 mcm or more per day normally scheduled.

Europe's benchmark gas price, the Dutch front-month contract , fell 1.1% to 36.00 euros/MWh by 0835 GMT. It had briefly spiked on Monday to a peak of 38.56 euros, its highest level since early December.

Nyhamna is able to process up to 79.8 mcm per day, while Britain's Easington terminal has a capacity of 72.50 mcm/day.

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