Gas imports reach all time high from Norway and Russia

Energy analysts at Société Générale are suggesting that gas prices could fall to seven-year lows in the UK and could be driven down by as much as 25% to 20p a therm. This is due to a price war in the face of possible liquefied natural gas (LNG) imports from the US, with both Norway and Russia preparing to flood Europe with gas in a battle to defend their market positions.

Norway has announced an increase in the quota from its Troll gas field to £33bn from October. Exports from the US are expected to be sold into markets where prices are highest, and as yet this has not yet directly affected European markets. UK gas prices are however already around 40% less than last year.

Total European imports from Norway and Russia reached an all-time high in the first quarter of this year and supplies are only expected to increase. With the two gas-rich nations being Europe’s largest suppliers of pipeline gas and both expected to boost supply this year in a bid to undercut the price of US cargoes of LNG.

Norway has stated that it plans to lift its gas production volumes by 10% from October with Russian state-owned Gazprom saying that it expected record-high gas exports to Europe in 2016.

US LNG exports are expected to be delivered globally to where prices are highest. No cargoes have been sold into the European market to date.

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