European natural gas prices surged on Monday to the highest level in six months as supply from Norway crumbled amid unplanned outages.
The Dutch TTF Natural Gas Futures, the benchmark for Europe's gas trading, surged by 10.4% to $40.94 (37.78 euros) per megawatt-hour (MWh) at 10:37 a.m. in Amsterdam after Norwegian natural gas flows dropped sharply on Monday. That was the highest price at Europe's gas hub since December.
The UK benchmark gas prices also soared by 15% as supply from Norway to Britain was crippled.
The Sleipner hub offshore Norway was shut down, which has also stopped operation at the Nyhamna onshore processing plant, pipeline operator Gassco told Reuters.
"There was an incident at the Sleipner Riser platform on Sunday, where we were told they are shutting down," Alfred Hansen, head of pipeline system operations at Gassco, told Reuters on Monday morning.
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.
Both terminals were shut on Monday and supply nominations for Norwegian gas slumped compared to Friday, per Gassco data cited by Reuters.
The pipeline operator is cooperating with Equinor, the operator at Sleipner Riser, to bring the hub back online, Gassco's Hansen told Reuters, but added it is not certain how long the platform would be offline.
"This looks like it might be somewhat complicated," Hansen said.
Norway became Europe's top gas supplier after the Russian invasion of Ukraine and the slump in Russian gas exports to the EU.
These unplanned outages highlight the vulnerability of Europe relying on natural gas imports.
In April, portfolio managers boosted their bullish bets on Europe's gas prices to the highest level in six months. Money managers have been concerned that unplanned outages in Norway during the summer, higher natural gas demand in Asia, and the end of the current gas transit deal for Russian pipeline gas to flow via Ukraine at the end of 2024 could sap gas supply for Europe and boost prices.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More