Europe reaches standard pace for offtake of gas from UGS facilities; Gazprom requests 42.4 mcm for transit via Ukraine
MOSCOW. Dec 1 (Interfax) - Offtake of gas from underground gas storage (UGS) facilities in Europe continues to gain intensity, and it is reaching the level of multi-year values for these days with all the conserving prescribed by the authorities.
Europe extracted 436 mcm of gas from UGS facilities over the last reporting day on November 29, and the total level of reserves decreased by 0.4 point. Moreover, the region is expecting a further noticeable decrease in temperatures.
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 December 1, 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.
EUROPEAN MARKET
According to the current forecasts, European temperatures should be about three degrees cooler this week than last week.
The spot price of gas in Europe has continued growing steadily amid the ongoing drop in wind power generation and the decrease in temperatures.
Wind turbines generated only 6.3% of the EU's electricity on average on Wednesday following 18% on average last week, when it even reached 22.4%, according to data from WindEurope.
The day-ahead contract for today at the Dutch TTF gas hub in the Netherlands closed at $1,508 per thousand cubic meters, and the January futures contract at the TTF is $1,574.
In Asia, the most expensive winter futures contract for January on the JKM Platts index is now $1,291 per thousand cubic meters on the heels of European prices.
The German Federal Network Agency has changed its assessment of the weather situation in the country from "stable" to "tense", according to the Bundesnetzagentur's daily overview of the country's gas supply situation.
The situation is considered "tense" when the average temperature forecast for the upcoming seven days is zero to two degrees Celsius below the average for 2018-2021, the agency noted.
The Bundesnetzagentur assesses the situation with the country's gas supply as tense, and does not rule out further deterioration. The agency encourages consumers to conserve gas. According to the regulator, gas shortages in winter could be avoided foremost when achieving the goal of conserving at least 20%.
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
Europe has begun withdrawing gas from its UGS facilities intensively, and inventories in storage facilities are currently 93.19%, a figure that is 10.5 percentage points above the average indicator for the past five years.
Reserves "thinned" 0.39 percentage point during the gas day on November 29, which was a new high since the start of the offtake season.
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 68% since the beginning of November against an average of 60% in October. Meantime, the productivity of terminals has been consistently above 70% for a week now.
U.S. INVENTORIES
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.