I was watching the Russia Ukraine spat over gas deliveries to Europe and kept promising (myself) to put pen to paper on the subject. Finally I carved out sometime on a train to start. As everyone in the (European) gas industry knows Europe is heavily dependent upon imported gas, particularly Russian gas, especially if you reside in Central and Eastern Europe. The UK has been lucky to have indigenous supplies close at hand in the North Sea. This local supply is declining, and the recent collapse in exploration wells in the North Sea will exacerbate that decline (although the latest I read is that UKCS production will hold up well this winter, the lagged response to historically higher prices). A recent FT Article (not so recent now) on the subject in part pushed me over the edge to put down my thoughts, the last push was the email the text of which I set out below on investment in storage. (more…)
