Offtake from European UGS facilities at all-time high for time of year; Gazprom requests 42.4 mcm for transit via Ukraine
MOSCOW. Dec 15 (Interfax) - Extraction from European underground gas storage (UGS) facilities has set an all-time high for this time of the year since monitoring began 12 years ago, and the regional forecast until the end of the week calls for clear or partly cloudy weather with severe frosts at night, thereby likely requiring more intensive burning of gas reserves.
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 15, 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
Nighttime temperatures continue to drop in Europe, and the first two weeks of December could be the coldest in years, with partly cloudy or clear weather expected this week.
Germany's Federal Network Agency (Bundesnetzagentur) forecasts that temperatures this week will be 3.18 degrees Celsius below the average for the past four years, and temperatures in Germany were minus 2.38 degrees below the average last week.
The Bundesnetzagentur considers the situation as "stable" when the average temperature forecast for the upcoming seven days is higher than the average for 2018-2021. The situation is "tense" when the average temperature for the upcoming seven days is zero to two degrees Celsius below the average; and the situation is "critical" when the average temperature is lower than two degrees Celsius below the average, the agency noted.
The day-ahead contract for today at the Dutch TTF gas hub in the Netherlands has closed at $1,460 per thousand cubic meters.
Wind turbines have generated 11% of the EU's electricity on average this week following 10% on average last week, according to data from WindEurope, though wind turbines provided twice as much electricity in November.
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 from the region's UGS facilities since December 6 has exceeded the average figures for the past five years. Temperatures that are considerably below the long-term average have been forcing the sector to use ever more gas despite politicians' appeals to conserve fuel.
European inventories in underground gas storage (UGS) facilities are currently 86.59%, a figure that is 10.2 percentage points above the average indicator for the past five years, according to Gas Infrastructure Europe (GIE).
Reserves "thinned" about 0.73 percentage point during the gas day on December 13, a new high since the start of offtake season.
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.
However, 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."
European LNG-receiving terminals have been operating at an average capacity-utilization of 68% since the beginning of December against an average of 69% in November. Meantime, the percentage of utilizing regasification capacities is much lower at 63%-67% over the past six gas reporting days from December 8 to 13. LNG inventories in the tanks of receiving terminals have been declining, implying that new shipments of LNG have been arriving to Europe more slowly than the market is consuming.
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 December 2 saw 0.6 billion cubic meters of gas extracted from UGS facilities.
The current level of inventories is around 72%, which is just 2% 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.