Gazprom analyzing impact of Urengoy gas plant fire on supplies to Russia, Europe
MOSCOW. Aug 6 (Interfax) - Gazprom is analysing the impact that the fire at a gas preparation plant in Urengoy will have on gas supplies to Russia and Europe.
Asked about the impact of the incident on supplies to Europe and fulfilment of contractual obligations, and how long recovery will take, the Russian gas giant said that an "analysis of the reasons and consequence of the accident is underway."
The gas price has soared above $540 per thousand cubic meters at trading in Europe as a better picture emerged of the scale of the accident at a Gazprom plant.
The nearest TTF futures contract on the ICE Futures exchange jumped to 44.4 euros per thousand kWh or $543 per thousand cubic meters today after closing at $525 yesterday.
A fire broke out on Thursday at the condensate de-ethanization unit of the first stage of the Urengoy Condensate Treatment Plant, which prepares gas for transport. The oil and gas condensate mixture supply to the Surgut Condensate Stabilization Plant was temporarily suspended.
Gas supplies via the Yamal-Europe pipeline were more than halved by Thursday evening: according to data from German gas transport operator Gascade, deliveries at the entrance to the German gas transport system were 2.1 million cubic meters per hour for most of the day. A gradual decrease began at about 5 p.m. but supplies during the hour from 6 p.m. to 7 p.m. Moscow time amounted to only 1 million cubic meters.
Those supplies rose to 1.5 mcm as the new gas day began, but it is too soon to treat that as an increase - the current level so far corresponds only to the average supply for the previous day.
Supplies via Nord Stream and via Ukraine are unaffected.
The recent accident at the Gazprom plant in Novy Urengoy will result in the concern having to cut output of gas by 8 billion cubic meters and gas condensate by 5 million tonnes in 2021, Renaissance Capital has written in a special analytical note.
RenCap's analyst have said that the damaged equipment had already been planned for replacement. In March 2021, the company's management board adopted the Comprehensive Program for Reconstruction and Technical Re-equipment of the Gas and Liquid Hydrocarbons Processing Facilities for 2021-2025, with commissioning of new equipment at the Urengoy plant in 2022. RenCap assumes that Gazprom does not intend to repair the damaged equipment, and plans to commission the new facilities next year.
Based on this assumption, the analysts believe that gas condensate production will bear the brunt of the accident, with output dropping by 5 million tonnes in 2021, or 29% of the group's expected production for the year.
The Urengoy Condensate Treatment Plant, the largest hydrocarbon treatment plant, is located near Novy Urengoy and is part of the Urengoy gas production complex that receives and treats unstable gas condensate from the largest fields in the Nadym-Pur-Tazov region.