U.S. joins Europe in active offtake of gas from UGS facilities; Gazprom requests 42.4 mcm for transit via Ukraine
MOSCOW. Nov 24 (Interfax) - The United States has joined Europe in actively withdrawing gas from its underground gas storage (UGS) facilities, though U.S. offtake is according to a multi-year schedule as opposed to Europe's one-month delay.
The U.S. had reached a five-year average level of reserves prior to offtake, though withdrawal has demonstrated more intensive dynamics than usual from the very first week.
Gazprom's request for pumping Russian gas through Ukraine has not changed markedly 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, 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 Sokhranovka 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 November 24, with booking via the Sokhranovka metering station declined," Gazprom spokesman Sergei Kupriyanov told reporters.
GTSOU has declared a force majeure with respect to acceptance of gas for transit through Sokhranovka, claiming that it cannot control the Novopskov compressor station. The route through Sokhranovka 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.
A new challenge for Ukrainian transit is the virtual reverse launched in September through Moldova to Ukraine. Gazprom has said some Russian gas intended for delivery to Moldovan consumers as per a contract with Moldovagaz has remained in Ukraine.
"If the transit imbalance through Ukraine for Moldovan consumers persists, then, on November 28, at 10:00 a.m., Gazprom will begin cutting gas supplies to the Sudzha metering system for transit through Ukraine in the amount of the daily shortfall," Gazprom said in a statement.
EUROPEAN MARKET
Temperatures in Europe have reached the seasonal average following atypically warm weather in October and early November, with preliminary average temperatures for the month only a degree higher than in November last year after October was three degrees warmer, though temperatures have been significantly colder in the second half of the month.
The day-ahead contract for today at the Dutch TTF gas hub in the Netherlands closed at $1,364 per thousand cubic meters, and the nearest December futures contract is trading at $1,398 per thousand cubic meters on the TTF index.
In Asia, the most expensive winter futures contract for January on the JKM Platts index is now $1,111 per thousand cubic meters on the heels of European prices.
Wind turbines have generated 21% of the EU's electricity on average this week following 19% on average last week, according to data from WindEurope.
The Nord Stream pipeline has been fully shut down owing to a number of sanctions-related problems regarding equipment maintenance. At the end of September, two lines of Nord Stream 1 and one line of Nord Stream 2 ruptured near the Danish island of Bornholm.
EUROPEAN INVENTORIES
Gas offtake for the last reporting day has once again reached the highest figure since the start of withdrawing reserves although extraction has just begun and is still gaining momentum.
Europe has begun withdrawing gas from its UGS facilities, and inventories in storage facilities are currently 94.58%, a figure that is 9.4 percentage points above the average indicator for the past five years.
Gazprom has also warned that, "The load on UGS facilities in Europe will be higher than in previous years owing to the changed logistics and sources of gas supplies to the European market."
The beginning of offtake season on November 14 this year was the latest since Gas Infrastructure Europe began monitoring in 2011, with the previous latest date coming on November 4, 2013.
In response to the lower temperatures, European LNG-receiving terminals have boosted regasification volumes, and the capacity-utilization factor has been 67% since the beginning of November against an average of 60% in October.
U.S. INVENTORIES
The U.S. has begun withdrawing gas from its UGS facilities. The latest reporting week ending November 18 saw 2.3 billion cubic meters of gas extracted from UGS facilities, slightly exceeding the usual rates for this time of year.
The current level of inventory is around 74%, which is just 1% lower than average for the past five years; nevertheless, the figure is substantially lower than inventories at UGS facilities in Europe and in Russia, according to the U.S. Energy Department's Energy Information Administration.
The EIA currently expects UGS stocks to drop by 60 billion cubic meters this winter to the average for the last five years. Natural gas volumes in storage facilities should total 40 bcm by the end of March, which would be 8% below the average for five years.