12 Sep 2022 12:01

Cold Sept apparently upcoming in Europe and Russia; Gazprom books 42.4 mcm for transit via Ukraine

MOSCOW. Sept 12 (Interfax) - Europe and Russia in the upcoming week could see typical weather for September, meaning rain and a noticeable drop in temperature, and cooling in Europe could be stronger and earlier than has previously occurred.

The request for transit of Russian gas through Ukraine today has changed little from the previous days and months.

UKRAINIAN TRANSIT

The Gas Transport System Operator of Ukraine, or GTSOU, has accepted a booking from Gazprom today to transport 42.4 million cubic meters of gas through the country against 42.4 mcm the previous gas day, data from GTSOU 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 Sokhranivka metering station.

"Gazprom is supplying Russian gas for transit through the territory of Ukraine at the volume confirmed by the Ukraine side via the Sudzha metering station at 42.4 mcm on September 12, with booking via the Sokhranivka metering station declined," Gazprom spokesman Sergei Kupriyanov told reporters.

GTSOU has declared a force majeure about accepting gas for transit through Sokhranivka, claiming that it cannot control the Novopskov compressor station. Ukraine has also said that if gas continued to be fed from Russia to the Sokhranivka station, amounts would be reduced accordingly at the exit points from Ukraine's gas transport system. The route through Sokhranivka had provided transit of more than 30 mcm of gas per day.

Gazprom believes there are no grounds for the force majeure or obstacles to continuing to operations as before.

EUROPEAN MARKET

Spot prices for gas in Europe have adjusted to $1,981 per 1,000 cubic meters for the TTF day-ahead contract.

Prices in Asia are rising on the back of prices in Europe. The most expensive January futures on the JKM Platts index, which reflects spot market prices for gas delivered to Japan, South Korea, China and Taiwan, are $1,822 per 1,000 cubic meters.

The Nord Stream pipeline from Russia to Europe has been unable to restart as planned after maintenance, as oil leaks were found in Siemens turbines and this problem can only be fixed with factory repairs, Gazprom said. The Siemens turbines can only be repaired at a plant in Montreal, but Canada has imposed sanctions against the Russian gas giant.

"Siemens currently has virtually no ability to carry out regular overhauls on our gas pumping units. Siemens simply has nowhere to do this work," Gazprom CEO Alexei Miller said.

Wind plants have generated an average of 12% of the European Union's electricity this week, and averaged 11% last week, while averaging 9.6% in September last year, data from WindEurope show.

European liquefied natural gas (LNG) receiving terminals are operating at an average of 60% of capacity in September compared to 59% in August, data from Gas Infrastructure Europe show. Imports of expensive LNG are decreasing partly because of gradually reaching the necessary reserve level in European storage.

EUROPEAN INVENTORIES

Europe is continuing to inject gas into underground gas storage (UGS) facilities, with the average level of reserves reaching the targeted 80% of capacity at the end of August. After reaching the target level, there has been some reduction in the injection rate, though the news that Nord Stream would not resume supplies owing to technical problems has prompted market players to return injection to the previous pace.

Inventories in UGS facilities are currently at 83.61%, up just 0.33 percentage points from the last reporting date on September 6, according to Gas Infrastructure Europe data. This is the lowest figure since the beginning of the month.

Gas inventories in UGS facilities have currently exceeded 80% in Belgium, the Czech Republic, Croatia, Denmark, France, Germany, Italy, the Netherlands, Poland, Portugal, and Spain.

Meanwhile, Austria, Bulgaria, Hungary, and Latvia are lagging, with the latter in the rear with 51%. Latvia resumed injecting gas into storage at the beginning of September.

U.S. INVENTORIES

Steady gas exports in the United States are reducing the amount of resources for injection into storage, which is supporting prices on the domestic market.

Current reserves in the country's UGS facilities are only 4.1% above the lowest figure in the past five years, and the figure has only fallen in the summer injection season, data from the U.S. Energy Department's Energy Information Administration show.

The rate of injection into U.S. UGS facilities has improved somewhat after the suspension of exports through the Freeport LNG terminal owing to an accident, though the current level of reserves is 11% lower than the five-year average.