European gas storage to reach 80% of capacity Mon, Gazprom transit request via Ukraine at 42.2 bcm
MOSCOW. Aug 29 (Interfax) - The average level of gas reserves in underground storage facilities in Europe will reach 80% of capacity on Monday, a milestone that will certainly carry political weight beyond its technical significance.
Data on the state of underground gas storage (UGS), reserve levels in which are now regulated by the law, have become one of the most important economic and political indicators for Europe, reflecting EU leaders' ability to ensure energy security. Europe imposed tight regulation of the use of UGS this year. Reserves are supposed to be at least 80% of UGS capacity by the start of the 2022 offtake season and increase to 90% in subsequent years.
Reserves in Europe's UGS facilities reached 79.36% on the last reporting date, August 27. The figure has been increasing by 0.3 percentage points on weekdays and 0.4 points on weekends this season, so by the end of the August 29 gas day reserves will reach 80%. However, politicians have already said that reserves will continue to be increased at a rapid pace.
Reserves in storage have now surpassed 80% of capacity in Belgium, the Czech Republic, Denmark, France, Germany, Italy, Poland, Portugal and Spain.
Meanwhile, Austria, Bulgaria, Croatia, Hungary, the Netherlands and Latvia are lagging, with the latter in the rear with 55%.
The request for transit of Russian gas through Ukraine on Monday was little changed from previous days and months.
Ukrainian transit
Ukraine's Gas Transmission System Operator (GTSOU) has accepted a request from Gazprom for Monday to transport 42.2 million cubic meters of gas through the country, the same as the previous day, data from OGTSU show.
Capacity was requested only through one of two entry points into Ukraine's Gas Transport System, the Sudzha metering station. A request was not accepted through the Sokhranovka metering station.
OGTSU declared a force majeure in regard to accepting gas for transit through Sokhranovka, claiming that it cannot control the Novopskov compressor station. The route through Sokhranovka provided transit of more than 30 mcm of gas per day.
Gazprom believes there are no grounds for a force majeure or obstacles to continuing operations as before.
European market
The supply of gas through the Nord Stream pipeline (NS1) from Russia to Europe has dropped to 33 mcm, and from August 31 to September 2 the pipeline will be shut down completely again for maintenance, news that led to another spike in prices.
At full capacity, NS1 can pump up to 167 mcm of gas per day, but capacity has fallen due to disruptions in the maintenance schedule for compressor equipment at the Portovaya compressor station that feeds the pipeline. It has gas pumping turbines from Rolls-Royce, whose gas turbine business was subsequently acquired by Germany's Siemens.
Due to Canadian sanctions, one turbine was not returned to Russia on time from Siemens Energy's service center in Montreal. Meanwhile, the time has come for maintenance on other turbines, both due to them reaching the end of their operating period between repairs and due to breakdowns.
Spot prices for gas in Europe increased to $3,222 per 1,000 cubic meters (day-ahead contracts on the TTF hub) after the drop in pumping capacity on NS1. Prices in Asia also rose. The highest priced winter futures, for January, on the JKM Platts (Japan Korea Marker) index, which reflects spot market prices for gas delivered to Japan, South Korea, China and Taiwan, rose to $2,877.
Part of the facilities at Norway's Troll field and Kollsnes gas treatment facilities are shut down for annual maintenance until the end of the month. Gas production capacity has decreased to 20 mcm, and new major shutdowns of Norwegian operations lie ahead.
Wind power's contribution to electricity generation across the EU fell to 9.5% last week from an average of 10% the previous week and 11.4% in August 2021, data from WindEurope show.
European liquefied natural gas (LNG) receiving terminals are operating at an average of 59% of capacity in August compared to 69% in July, data from Gas Infrastructure Europe showed. Average daily gas deliveries from LNG terminals are down 14% month-on-month in August. Imports of expensive LNG are decreasing, in part due to the gradual achievement of the necessary reserve level in European storage.
New troubles for LNG shipments to Europe could be ahead. The hurricane season in the Gulf of Mexico usually peaks from mid-August to mid-November, which could hinder U.S. LNG exports. The latest forecasts for the season indicate that stronger hurricanes than usual are likely.