Poland, France tapping UGS reserves, Gazprom transit request via Ukraine at 43.4 mln cubic meters
MOSCOW. Oct 6 (Interfax) - European countries are slowly beginning to tap reserves injected into underground gas storage (UGS) facilities this summer at the most expensive price in history. Poland and France reported net offtake (when cumulative country-wide offtake exceeds injection).
Normally, the offtake season in Europe starts two weeks later, around October 20.
Gazprom's request for pumping Russian gas through Ukraine has not changed from the previous days and months.
UKRAINIAN TRANSIT
The Gas Transport System Operator of Ukraine, or GTSOU, has accepted booking from Gazprom today to transport 42.4 million cubic meters of gas through the country on Thursday, unchanged from 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 43.4 mcm on October 6, with booking via the Sokhranivka metering station declined," Gazprom spokesman Sergei Kupriyanov told reporters.
GTSOU has declared a force majeure with respect to acceptance of 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
Wind power generation accounted for an average of 24% of the EU's energy mix Wednesday, after a figure of 14% in the first two days of the week, data from WindEurope showed. Last week's average was 19%.
Indian summer weather in conjunction with strong wind generation led to localized declines in gas prince in Europe. Spot prices for fell to their lowest since June. The day-ahead contract at the TTF hub in the Netherlands closed at $1,005 per 1,000 cubic meters. The November futures index closed at $1800. In Asia, the most expensive winter futures contract for February on the JKM Platts index (Japan Korea Marker; reflects the spot market price for gas delivered to Japan, South Korea, China and Taiwan) now stands at $1,552.
The Nord Stream pipeline is completely shut down. The Siemens engines used for its operation are leaking oil, and this malfunction can only be repaired at the factory. This is only possible at the Montreal plant, and Canada has imposed sanctions on Gazprom. In addition, last week there was a depressurization of two strings of Nord Stream 1 and one of Nord Stream 2 near the Danish island of Bornholm.
European liquefied natural gas (LNG) receiving terminals are operating at an average of 61% of capacity in October, compared with 59% in September and August, data from Gas Infrastructure Europe indicate.
EUROPEAN INVENTORIES
Europe continues injection into underground storage facilities. At the end of August, the average level of reserves in underground storage facilities in the region reached the minimum target level of 80%. Since then, there has been a slight decline in the pumping rate. European storage facilities typically transition from net injection to net offtake around October 20.
Inventories in UGS facilities are currently at 89.85%, up 0.21 percentage points from the last reporting date, according to Gas Infrastructure Europe data.
Gas inventories in UGS facilities have currently exceeded 80% in Austria, Belgium, the Czech Republic, Croatia, Denmark, France, Germany, Italy, the Netherlands, Poland, Portugal, and Spain.
Meanwhile, Bulgaria, Hungary, and Latvia are lagging. Bulgaria must continue injection for one to one and a half weeks, while Hungary requires another three weeks.
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.
At the same time, offtake of gas from underground storage facilities is growing. In Europe as a whole on October 4 it reached 25% of injection. The Netherlands are most active in tapping reserves, but gas injection exceeds offtake there. Poland and France saw net offtake of gas from UGS facilities on October 4.
U.S. INVENTORIES
The U.S. has boosted injection gas into storage, households have stopped using air conditioning, and there is no immediate demand for heating, thereby allowing more injection of 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 tonnes 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 current level of inventories 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%.