New LNG terminal in Netherlands supplying gas to GTS; Gazprom books 42.4 mcm for transit via Ukraine

MOSCOW. Sept 23 (Interfax) - The new LNG receiving terminal has physically come on line in the Netherlands, and Gas Infrastructure Europe statistics since September 16 have indicated data on gas being received from the EemsEnergy LNG floating receiving regasification terminal.

The Czech Republic's CEZ, Shell Western LNG BV, and France's Engie are the three companies that have booked the terminal. Data for the first six days demonstrate examples of utilizing the terminal's capacity at 73% to 99.99%.

Gazprom's request for pumping 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 23, 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 operations as before.

EUROPEAN MARKET

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.

Spot prices for gas in Europe have adjusted to $1,747 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 $1,810 per 1,000 cubic meters.

Wind plants generated 7.3% of the European Union's electricity on Thursday, 15.7% on Monday, 8% on Tuesday, and 7.1% on Wednesday, after averaging 17.3% last week, while averaging 9.6% in September last year, data from WindEurope show. Germany's wind turbines met only 4.6% of demand, Belgium's wind turbines met 1.3%, and the Netherlands' wind turbines met 1.5%.

Europe's current temperatures are reaching lows for the month of September, and could be the coldest for the past nine years at two degrees below last year's figure. The forecast in Europe until the end of the month is light winds or calm weather.

European liquefied natural gas (LNG) receiving terminals are operating at an average of 58.5% of capacity in September compared to 59% in August, data from Gas Infrastructure Europe indicate, and gas has been received from the EemsEnergy LNG floating receiving regasification terminal since September 16 in the Netherlands.

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.

Inventories in UGS facilities are currently at 86.67%, up just 0.21 percentage points from the last reporting date, according to Gas Infrastructure Europe data, and this is the lowest figure for the month thus far.

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 at around 52%. Latvia resumed injecting gas into storage at the beginning of September.

The gas reserves at the Incukalns UGS facility in Latvia are the lowest in the EU. Pumping is 66.7%-75% below the European average despite this UGS facility being responsible for reserve gas supplies to Estonia, Latvia and Lithuania, as well as Finland.

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.

The current inventory level is around 71%, which is substantially below the reserves at UGS facilities in Europe, with the EU having topped this level a month-and-a-half ago, and even more so in Russia, which has over 90%.

Current reserves in the country's UGS facilities are only 5% 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 lag behind the norm for the past five years is 10%.

The rate of injection increased during the last reporting week, with 2.9 billion cubic meters accumulated compared to 2.2 bcm on average over the previous three weeks.

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.

Additionally, Cove Point terminal, with a capacity of 5.25 million tonnes per year, will stop for scheduled maintenance in September-October, with the volumes exported through the terminal also remaining on the domestic market.