French gas reserves fall to lowest in Europe

France’s gas reserves have reached the lowest level in Europe after widespread strikes protesting President Emmanuel Macron’s proposed pension reforms impacted imports.

Industry data cited by the International Energy Agency revealed that gas stocks in France were 28% full at the end of March, compared to a 56% average throughout Europe. Efforts to increase reserves and prevent another energy crisis next winter were hindered by the extensive industrial action over the past few months.

In February and March, French workers protested against Macron’s plan to raise the pension age to 64, a policy that has now become law. These strikes caused disruptions at import terminals responsible for processing gas shipped from around the world. In March, an 11-day disruption occurred at a terminal in Dunkirk, with additional issues at other terminals such as Fos Cavaou in the south.

According to the IEA, liquefied natural gas (LNG) flows into France declined by 55% in March compared to the previous year due to the strikes. As a result, vessels were redirected to other European ports, including Spain, Greece, and the UK.

The International Energy Agency (IEA) stated that France has had to rely on its storage inventories due to the impact of the strikes. The protests also affected the country’s electricity output, prompting Britain to prepare spare coal-fired power units for potential additional imports to France.

In its latest gas market report, the IEA noted that despite a significant drop in prices in recent months, the gas market outlook remains uncertain. European natural gas prices reached a 21-month low on Wednesday, with Dutch front-month futures, Europe’s gas pricing benchmark, falling nearly 1.9% to below $37 per megawatt hour. This drop is attributed to record LNG imports on the continent.

However, the IEA cautioned that the global gas supply is expected to remain tight in 2023, with numerous uncertainties influencing the global balance. These include unfavourable weather conditions, reduced LNG availability, and the potential for a further decline in Russian pipeline gas deliveries to the European Union.

The IEA reported a 1.5% decline in global gas consumption in 2022, mainly due to decreases in Europe and Asia, where prices soared. Russia now supplies only 10% of the EU’s gas, compared to over a third before the war. This reduction in Russian supplies has allowed the US to play a more prominent role in the global gas market, with the country projected to become the world’s largest LNG exporter this year.

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