Monthly French natural gas exports to Spain look set to fall to their lowest levels in over five-and-a-half years in May as a combination of unfavorable price spreads, lower demand and strikes in France led to flows between the two countries falling, an analysis by S&P Global Platts shows.
During the May 1-25 period, a mere 72 million cu m was imported by Spain from France at an average of under 3 million cu m/d according to data from Eclipse Energy, an analytics unit of Platts.
This compares to the 207 million cu m imported by Spain in April, the 373 million cu m in March, and the 191 million cu m from May 2015.
Moreover, if imports continue at current rates for the remainder of May, Spanish imports of French gas will be at their lowest for a calendar month since September 2010, when just 55 million cu m was imported.
Price spreads between the Spanish AOC hub and the French TRS hub have flipped recently with strikes in France affecting short-term gas supply in the country.
Nonetheless, flows from France to Spain were already weakening ahead of strike action with a monthly fall in storage injections allied to weaker month -on-month demand from neighboring Portugal.
The TRS day-ahead was assessed at Eur14.50/MWh by Platts Thursday, a four -week high, after having been assessed below Eur13/MWh during the first week of May -- the AOC day-ahead was valued at Eur13.75/MWh Thursday according to market participants.
Moreover, the firm spot has supported the front-month contract on the TRS hub recently with the TRS June 16 contract assessed at Eur14.025/MWh Thursday, a 22.5 euro cent premium to the AOC equivalent.
The AOC front-month was at a 35 euro cent discount to the TRS front-month Tuesday after having been at more than a Eur1.50/MWh premium in early April, implying that flows between the two countries could fall further in the short- term.
