Europe starts pumping gas into storage, Gazprom's Ukraine order is 42.4 mcm
MOSCOW. April 5 (Interfax) - Since the start of April, Europe has gone from extracting gas from its underground storage facilities to replenishing its reserves. Gas injection has consistently exceeded withdrawal during the first week of April. Temperatures are expected to rise further in the coming days, which means that the upward trend towards storage will be supported.
UKRAINIAN TRANSIT
Ukrainian GTS Operator OGTSU accepted an order from Gazprom for transportation of 42.4 mcm of gas on Friday, the Ukrainian company said. Thursday's order was the same. Capacities are declared only for one of the two entry points into the country's gas transportation system, the Sudzha gas measuring station. The application for the corridor through the Sokhranovka GIS was not accepted.
Gazprom spokesman Sergei Kupriyanov told reporters that the company is supplying Russian gas for transit through the territory of Ukraine in the volume of 42.4 mcm, confirmed by the Ukrainian side, via the Sudzha GIS on April 5. The application for GIS "Sokhranovka" was rejected.
OGTSU declared force majeure on the acceptance of gas for transit through Sokhranovka, since it allegedly cannot exercise operational and technological control over the Novopskov compressor station. The route through Sokhranovka provides transit of more than 30 mcm of gas per day. Gazprom believes the force majeure claim unjustified, and that there are no obstacles to operating as before.
EUROPEAN MARKET
The spot price of gas in Europe increased by less than 1% on Thursday. The contract for day-ahead delivery at the TTF hub in the Netherlands closed at $290 per thousand cubic meters.
Wind generation in Europe has provided an average of 22% of the region's electricity needs since the beginning of April, reports the WindEurope association. A year ago, in April 2023, the contribution from wind power plants was 15%, while in March 2024, it was 19%.
The price gap for LNG in Asia versus Europe is growing. May futures for the JKM Platts index (Japan Korea Marker, reflects the spot market value of cargo supplied to Japan, South Korea, China and Taiwan) are trading at $341, while futures for LNG supplied to the North West Europe Marker are at $294.
RESERVES IN EUROPE
The level of natural gas reserves in Europe is one of the key indicators for the global market.
Europe has switched from winter withdrawal to summer injection into its underground gas storage facilities. The changeover occurred on April 1 at the level of 58.34% (in 2023, the switch occurred on April 4 at a level of 55.54%).
The current European average UGS occupancy rate has reached 59.44%, 17 percentage points higher than the average for the same dates over the past five years, Gas Infrastructure Europe reports. Current stock levels are again at record highs (the GIE database contains data back to 2011).
European LNG terminals operated at an average productivity of 50% in March 2024. Their average load has been 48% since the beginning of April.
RESERVES IN US
The state of reserves in American underground gas storage facilities is becoming increasingly important as the country actively increases exports.
The United States continues to withdraw gas from storage facilities. Gas reserves decreased by 1 bcm during the most recent reporting week, a level 25% higher than usual at this time of year.
The country's current inventory level is 47%, 23% higher than the average over the past five years, the Energy Information Administration (EIA) said.