World gas prices ease as EU reduces injection into storage, Gazprom transit request via Ukraine at 42.3 bcm
MOSCOW. Sept 1 (Interfax) - The rate of gas injection into underground storage facilities in Europe slowed dramatically after reserves reached the targeted 80% of capacity on average across the European Union, which has cooled prices in Europe as well as in Asia.
The request for transit of Russian gas through Ukraine on Thursday was little changed from previous days and months.
Ukrainian transit
Ukraine's Gas Transmission System Operator (GTSOU) has accepted a request from Gazprom for Thursday to transport 42.3 million cubic meters of gas through the country, compared to 42.2 mcm 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 Nord Stream pipeline (NS1) from Russia to Europe has been shut down for three days of maintenance, until the early morning of September 3.
At full capacity, NS1 can pump up to 167 mcm of gas per day, but capacity has fallen by 80% 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 corrected to $2,388 per 1,000 cubic meters, and prices in Asia followed. 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, dropped to $2,054.
Maintenance work is continuing in Norway at the Kollsnes gas treatment facility and the Kristin, Oseberg and Troll fields, reducing gas production capacity by 35 mcm per day.
Wind power's contribution to electricity generation across the EU amounted to 9.5% in the first three days of this week, compared to an average of 9.5% last week and 11.4% in August 2021, data from WindEurope show.
European liquefied natural gas (LNG) receiving terminals operated at an average of 58% of capacity in August compared to 69% in July, data from Gas Infrastructure Europe showed. Average daily gas deliveries from LNG terminals were 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.
Gas reserves
Europe is continuing to inject gas into underground gas storage (UGS) facilities. Data on the state of 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 November 1, 2022 and increase to 90% in subsequent years.
The average level of gas reserves in UGS in Europe rose to 80.43% of capacity, according to data from Gas Infrastructure Europe. They increased by 0.27 percentage points on the last reporting day, August 30. The pace of injection into storage has slowed considerably after the threshold of 80% was crossed.
Reserves in storage have now surpassed the target level 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% as it stopped injecting gas into its Incukalns storage facility in mid-August.