European wind-power generation drops nearly 50%; Gazprom books 42.5 mcm for transit via Ukraine
MOSCOW. Sept 29 (Interfax) - Electricity generated from wind power in Europe has dropped nearly 50% in the past two days, and the forecast for Thursday and Friday calls for practically calm weather, which requires utilizing other sources of energy.
Gazprom's request for pumping Russian gas through Ukraine today has not changed 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 42.5 mcm on September 29, 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
Europe's current temperatures are reaching all-time lows for the month of September, and could be the coldest for the past nine years at more than two degrees below last year's figure. The forecast in Europe until the end of the month is light winds or calm weather.
Another cold spell has begun in Europe, and it should last at least a couple of days.
Electricity generated from wind power has dropped for the second consecutive day. Wind turbines generated 22.8% of the European Union's energy balance on Monday, falling to 13.6% on Wednesday. Meantime, the figure is only 6.8% in Germany and 3.3% in the Netherlands, according to data from the WindEurope association. The average for September 2021 was 9.6%.
Spot prices for gas in Europe have risen sharply since Gazprom announced that Naftogaz Ukraine's latest lawsuit could disrupt transit through Ukraine, adjusting to $2,005 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 $1,962 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.
Moreover, there were reports on Monday of a drop in gas pressure in two strings of Nord Stream 1 and in one string of Nord Stream 2 near the Danish island of Bornholm.
European liquefied natural gas (LNG) receiving terminals are operating at an average of 59% 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 88.17%, up just 0.2 percentage points from the last reporting date, according to Gas Infrastructure Europe data.
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 Austria showing a clear trend toward reaching the target level of reserves by October 1, and Bulgaria and Hungary have also intensified injection, though could be several days late to the prized line.
The gas reserves at the Incukalns UGS facility in Latvia are the lowest in the EU at around 53%. Pumping is 50% 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 fell in the summer injection season, though it has risen slightly in the past week, 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 reporting weeks. The end of using air conditioning and no heating demand thus far allow the industry to allocate more gas to storage.
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.