25 Mar 2022 12:45

European wind generation falls to its lowest in 2 months, Gazprom bookings for transit via Ukraine at peak on Friday

MOSCOW. March 25 (Interfax) - Pumping via the Ukrainian gas-transit corridor on Friday remains at the same peak level, corresponding to the volumes of the long-term contract of 40 billion cubic meters per year, or 109 million cubic meters per day.

European buyers have increased bookings for supplies of gas from Gazprom following the sharp rise in prices owing to the sanctions being imposed against Russia. The current price of gas at the Dutch TTF gas hub is $1,165 per thousand cubic meters, implying that off-take per contract with Gazprom - the most expensive month-ahead contract in March is around $930 per thousand cubic meters - remains a better deal than buying spot.

"Gazprom is supplying Russian gas for transit through the territory of Ukraine in the regular mode in accordance with the bookings of European consumers at 105.1 million cubic meters on March 25," Gazprom spokesman Sergei Kupriyanov told reporters.

According to the data of the Gas Transmission System (GTS) Operator of Ukraine, nomination for March 25 is 105.8 million cubic meters, and bookings for March 24 totaled 105.2 million cubic meters.

The Yamal-Europe gas pipeline, which pumps gas through Belarus and Poland to Germany, switched to reverse mode last week and has been pumping in this direction since then. Gas supplies from Germany to Poland, meaning off-take of additional volumes from the main European hubs, are another component of the current high prices in the EU.

Temperatures continue to rise in Europe as spring approaches, and this week should average 4 degrees warmer than last week according to the forecast. However, next week, which is the end of March and beginning of April, is expected to be a bit colder, with frost at night that should uphold gas prices.

In Europe, there is a continued decline in wind power generation, which is intended to help the region reduce its dependence on fuel from Russia. The difficult-to-predict decline in renewable energy generation is a catalyst for the growth of gas demand and - consequently - gas prices.

The contribution of wind generation to the energy balance of Europe averaged 17% for the week of March 14 to 20; in the current week the indicator fell further to 8.4%, its lowest since late January. This figure is declining for the fifth day in a row. Light winds are expected for this week, thereby further reducing electricity generation from renewable sources and implying growth in demand for gas and prices.