Cold spell taps to minimum injecting gas into EU UGS facilities; Gazprom books 43.7 mcm for transit via Ukraine
MOSCOW. Sept 30 (Interfax) - The recent cold spell in Europe has led to a seasonal decline in pumping gas into underground gas storage (UGS) facilities, and Latvia has begun offtake amid lower reserves on the continent.
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 43.7 mcm on September 30, 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 another couple of days.
Electricity generated from wind power has dropped for the third consecutive day. Wind turbines have generated 22.8% of the European Union's energy balance, falling to 10.9% on Thursday. Meantime, the figure is only 4.7% in Germany and less in the Netherlands and Belgium, 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 $1,819 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 $1,790 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 88.25%, up just 0.18 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
The U.S. has boosted injecting gas into storage, households have stopped using air conditioning, and there is no immediate demand for heating, thereby allowing injecting more gas into UGS facilities. UGS are full because Freeport LNG terminal has ceased exports following an accident. Also in September-October, the Cove Point plant with a capacity of 5.25 million tons per year will stop for scheduled repairs for 17 days, the volumes exported through it will also remain on the domestic market. Repairs are also ahead at other LNG plants.
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 current inventory level is around 74%, 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%.
U.S. UGS gas inventories are now only 6.5% above the minimum for the past five years, according to the Energy Information Administration (EIA) of the U.S. Department of Energy. The lag from the norm of the average level is 9%.
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.