The maintenance planned by Norway, the largest natural gas supplier in Europe, may push up the prices of natural gas and liquefied natural gas this summer. The geopolitical tensions in the Middle East and Ukraine have raised concerns about natural gas supply disruptions, further affecting prices. However, it is expected that the new liquefied natural gas export project, which is expected to start production from 2025, will stabilize prices in the medium to long term.

Royal Bank of Canada Capital Markets stated in a report on Thursday that maintenance in Norway and supply concerns arising from conflicts in the Middle East and Ukraine will support pipeline natural gas and liquefied natural gas prices in the near future.

The bank stated that all these factors have raised the "risk barometer" by one level this summer.

Royal Bank of Canada Capital Markets stated that maintenance and unplanned disruptions in Norway, Europe's largest single natural gas supplier, are price drivers worth paying attention to this summer.

The bank's analyst pointed out that a new round of planned maintenance will occur in September, which may put upward pressure on liquefied natural gas prices in Europe and globally due to the potential intensification of competition for natural gas.

At the beginning of this summer, unplanned disruptions triggered several increases in European benchmark natural gas prices.

In June, the disruption of the Sleipner hub caused the European natural gas trading benchmark, Dutch TTF Natural Gas Futures, to soar 10% in one day on June 3, reaching its highest level in six months.

After the conflict between Russia and Ukraine and a significant decline in Russia's natural gas exports to the European Union, Norway has become Europe's largest natural gas supplier. This unplanned natural gas supply interruption highlights the vulnerability of Europe's dependence on natural gas imports.

Recently, due to concerns that Russia may cease pipeline supply through Ukraine, natural gas prices hit their highest level of the year last week.

Last weekend, despite the conflict on the border between Russia and Ukraine, natural gas continued to be transported near the only natural gas metering station where Russia delivers natural gas to Europe via Ukraine.

Despite the escalation of tensions between Ukraine and Russia, both sides have expressed no intention of interrupting the pipeline that transports natural gas through Ukraine to Europe.

Royal Bank of Canada stated that although pipeline natural gas and liquefied natural gas prices may be supported by supply concerns in the short term, with a wave of new liquefied natural gas export projects impacting the market, prices may become more stable in the medium to long term.

The bank pointed out that from 2025 onwards, the wave of liquefied natural gas will drive normalization.

Daily chart of continuous natural gas contracts