Europe slows offtake of gas from UGS facilities because of warm spell; Gazprom requests 42.4 mcm for transit via Ukraine
MOSCOW. Nov 25 (Interfax) - Europe has slightly slowed the intensity of withdrawing gas from underground gas storage (UGS) facilities because of milder weather that is expected to continue in the region until the end of the week, though temperatures are expected to decline again beginning next week.
Gazprom's request for pumping Russian gas through Ukraine has not changed markedly from the previous days and months.
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 42.2 mcm on November 25, 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.
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 $1,281 per thousand cubic meters, and the nearest December futures contract is trading at $1,319 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 20% of the EU's electricity on average this week following 19% on average last week, though the figure dipped to 16% on Thursday, 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.
Reserves "thinned" 0.17 percentage point during the gas day on November 23 after 0.23 point on November 22, which has been the highest figure since the start of the withdrawal season.
Europe has begun withdrawing gas from its UGS facilities intensively, and inventories in storage facilities are currently 94.38%, a figure that is 9.5 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.
The state of gas in UGS facilities in the United States is of increasing importance for the global market, and the country is actively increasing gas exports, primarily to Europe, while production is rising at a slower pace.
The U.S. has joined Europe in 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.