Europe picking up pace of offtake from UGS facilities; Gazprom requests 35.5 mcm for transit via Ukraine
MOSCOW. Jan 11 (Interfax) - Europe has resumed business activity following the holidays, thereby restoring the pace of gas consumption to more significant levels from the symbolic figures at the start of the year.
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 35.5 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 35.5 mcm on January 12, 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 that there are no grounds for the force majeure or obstacles to continuing operations as before.
EUROPEAN MARKET
Prices on the European market have slipped on the back of warmer-than-expected temperatures ahead of the weekend. The day-ahead contract for today at the Dutch TTF gas hub in the Netherlands has closed at $678 per thousand cubic meters, and the February futures contract was $724 per thousand cubic meters.
In Asia, the most expensive winter futures contract for February on the JKM Platts index remains higher at $959 per thousand cubic meters on the heels of European prices.
Power generation from wind turbines in Europe has averaged 26% this week following an average of 24% last week, according to data from WindEurope.
EUROPEAN INVENTORIES
Current inventory levels in Europe's underground gas storage (UGS) facilities have declined to 82.59%, which is 17 percentage points above the average for the same date over the past five years, according to Gas Infrastructure Europe (GIE).
Reserves contracted 0.24 percentage point during the gas day for January 10, the highest offtake figure since December 20.
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 terminals have been operating at 63% capacity since the beginning of January against an average of 67% in December.
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.
The latest reporting week ending December 30, 2022, saw 6.3 billion cubic meters of gas extracted from UGS facilities owing to the sharp drop in temperatures.
The current level of inventories is around 60%, which is already seven percentage points lower than the average for the past five years, according to the U.S. Energy Department's Energy Information Administration.
A significant reduction in offtake is expected going forward owing to rising temperatures and restoring production volumes.
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.