LNG

Spanish natural gas and LNG terminals operator Enagás has signed an agreement with the Port of Huelva in southwest Spain to promote various gases including bioLNG made from waste.

Enagás, the Spanish gas grid and terminals operator, increased profits in the first six months of 2023 helped by one-time items as LNG activities increased to help the European Union’s natural gas shortfall and the utility also boosted future capacity on the Trans-Adriatic Pipeline from Azerbaijan.

The company’s net profits jumped to €172.8M including a net gain of €42.2M from the sale of a stake in the Morelos Pipeline in Mexico and an €133.8M adjustment relating to the Tallgrass Energy operations in the US.

“The Spanish Gas System operated 100 percent availability, Spain increased its total gas exports by 55 percent in the first half of the year and ship reloading has increased by 67 percent, contributing to Europe's security of supply,” Enagás stated.

Italy was a main destination for LNG re-exports to Europe while pipeline gas connections increased by 33 percent to 28.6 terawatt hours. The company already trans-ships LNG to the EU from terminals like Barcelona.

“Spain's underground natural gas storage facilities are at 98 percent capacity, an all-time high for the month of July,” it added.

Revenues up

The Madrid-based company reported first-half revenues of €450.5M, a drop of 5.8 percent from €472.2M registered in the first six months of 2022.

Enagás said it was still on track to meet the full-year earnings target of between €310M and €320M.

Enagás added that in July it closed the agreement announced in January to acquire an additional 4 percent stake from European trader AXPO in the Trans-Adriatic Pipeline (TAP) for €168M, taking its stake in the pipeline bringing Azerbaijan gas to Europe up to 20 percent.

During the first half, Enagás contracted additional transport capacity of 1.2 billion cubic metres from TAP, in addition to the current 10 Bcm starting in 2026.

During an eventful first half, Enagás noted the start-up of the El Musel LNG trans-shipment terminal in the Port of Gijón in northwest Spain and the assignment of its logistics services to the European utility Endesa.

“The terminal has already received two LNG shipments and will start commercial operation on July 31 after a capacity allocation process that has aroused great interest,” the company added.

Another highlight was the agreement with regional gas company Reganosa through which Enagás acquired its 130-kilometres of strategic gas pipelines in northern Spain and Reganosa agreed to purchase a 25 percent stake in the El Musel regasification terminal.

“The closing of the deal was expected in the second half of this year,” said the company.

In LNG activities outside of Spain, Enagás became an industrial partner with a 10 percent stake in the Hanseatic Energy Hub consortium planning an onshore LNG import terminal at the German North Sea port of Stade.

Enagás, the Spanish natural gas grid and LNG terminals operator, said first-quarter net profits excluding one-time items dropped by 21 percent and revenues also fell even as LNG and pipeline gas delivers rose and 43 percent of the LNG stored in Europe during the quarter was in the tanks of the six Spanish regasification terminals.

Spain’s foreign trade report covering the first two months of 2023 said that natural gas exports from Spain, including LNG and pipeline natural gas, amounted to €628.8 million ($690M) in total to nations like France, Portugal, Italy, Germany and Morocco.

The data showed that this was 194.3 percent higher than the €213.6M of gas exports in the same January and February period of 2022 and before the impact of the Russian invasion of Ukraine on energy markets.

Analysts note that Spain’s natural gas imports by pipeline from Algeria and by LNG carriers in its countrywide network have traditionally resulted in a big deficit in the trade balance for gas.

However, the latest Spanish trade report shows the gas deficit bill for January and February was reduced by €500M.

“The accumulated deficit in the first two months of 2023 stood at €2.54 billion compared with the €3.04Bln it reached in the same period last year,” said the report.

In the first months of 2023, the report showed that almost all of Spanish traded LNG went to Italy and cost €299M and next was Germany with €132.73M of deliveries, Portugal with €32.1M and the Netherlands €23.3M.

Spanish statistics also show that in the first two months of 2023 a total of 12,402.9 gigawatts hours were exported, of which 60.79 percent was transported through gas pipelines and 39. 21 percent in ships as LNG.

By quantity of gas purchased, France leads in this case the list of countries that have purchased the most gas from Spain.

Interconnections

The French imported 4,526.2 GW/h of gas in January and February, followed by Italy (3,284 GW/h), Portugal (1,897.3 GW/h) and Morocco (1,216 GW/h).

Specifically, pipeline gas exports through the interconnections with France broke records in the first two months to exceed 35 terawatt hours (TWh), the equivalent of 3.88 billion cubic metres of natural gas.

In total, through the interconnections with France and Portugal, Spanish exports reached 41 TWh, the highest figure since 2016.

Spain has six LNG import terminals operating and is currently re-launching a seventh previously moth-balled facility. The El Musel terminal in the Port of Gijón is capable of contributing up to 8 Bcm of additional LNG to the European Union’s supply through trans-shipments.

Spanish grid operator Enagás has capacity at six LNG regasification terminals in Spain.

It owns five terminals at Barcelona in the northeast, at Cartagena in the southeast, at Sagunto in the east of Spain, at Huelva in the southwest and the El Musel terminal in the northwest.

Overall in the whole EU, there were also 13.7 Bcm of pipeline natural gas imports in the month of March alone, which was 14 percent higher than the previous month of February, though 39 percent down on March 2022.

So far in 2023, the EU’s cumulative pipeline gas supply for the first three months decreased by 37 percent year-on-year to 38.3 Bcm, driven by falls in imports mostly from Russia, but also due to lower volumes being received from Norway and Algeria, while imports from Azerbaijan on the Trans-Adriatic Pipeline have risen.

Enagás, Spain’s natural gas grid and LNG network operator, reported slight declines in 2022 net profits and revenues after a year of high volatility in the energy markets with the Spanish Gas System operating without halt and Enagás infrastructure helping maintain the security of supply of the European Union.