Testing times for the European gas sector

The market was already enduring a difficult 2020—and the Covid-19 outbreak will test it to its limits

The gas industry was already facing a quandary at the start of 2020—when it still seemed the Covid-19 outbreak could be contained to China. Through 2019, the world had begun to struggle to absorb the volume of new gas supply coming to market, as LNG facilities commissioned in response to a long-faded price signal continued to come onstream. Europe helped soak up much of this new supply as it built up storage inventories to guard against a potential flare-up of tensions between Russia and Ukraine over the renewal of their transit arrangements. But even then, these shipments into Europe were only defraying the losses of the offtakers from these new facilities, with delivered prices failing to