Mild, rainy and windy week in store for Europe; Gazprom requests 24.2 mcm for transit via Ukraine
MOSCOW. Jan 30 (Interfax) - Europe can expect at least a week of mild, rainy and windy weather, which will boost alternative forms of energy like wind generation and enable the continent to economize on other fuels like gas.
UKRAINIAN TRANSIT
The Gas Transport System Operator of Ukraine, or GTSOU, has accepted a booking from Gazprom today to transport 24.2 million cubic meters of gas through the country, as on Sunday, data from the 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 24.2 mcm on January 30, with booking via the Sokhranovka metering station declined," Gazprom spokesman Sergei Kupriyanov told reporters.
The 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
Power generation from wind turbines in Europe averaged 14% last week, 18% the previous week and 29% the week before that, according to data from WindEurope.
The day-ahead contract for today at the Dutch TTF gas hub in the Netherlands closed at $630 per thousand cubic meters.
The "Asian premium", or the spread between gas prices in Asia and LNG prices in Europe, is steady. In Asia, the most expensive futures contract for March on the JKM Platts index is $696 per thousand cubic meters, and futures under the LNG North-West Europe Marker are $595 per thousand cubic meters.
EUROPEAN INVENTORIES
Current inventory levels in Europe's underground gas storage facilities have declined to 73.9%, which is 20 percentage points above the average for the same date over the past five years, according to Gas Infrastructure Europe.
Inventories contracted 0.6 percentage point during the gas day for January 28, a Saturday when commercial gas consumption falls and with it gas offtake from underground storage.
However, the relatively mild weather in October and November and thus far in January, in addition to the continent's austerity measures, have resulted in the level of reserves in UGS facilities being at an all-time high for this time of year since monitoring began, thereby underpinning the authorities' confidence in getting through the winter in good shape.
European LNG terminals have been operating at 63% capacity since the beginning of January against an average of 67% in December. January LNG imports are down 5% from December. LNG inventor at terminals is falling even more, in a sign that the region is receiving less in the way of new LNG cargoes.
Germany has opened its second LNG terminal on the Baltic coast at Lubmin in addition to the terminal at Wilhelmshaven, although the recently opened Eemshaven terminal in the Netherlands has closed at least until the end of January owing to damage to the heating supply system.
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.
Reserves decreased 2.6 billion cubic meters for the latest reporting week ending January 20, 2023. Consumption of inventories has been recovering owing to the normalizing weather, though it is still below the typical level for this time of year.
The current level of inventories is around 57%, which is five percentage points higher than the average figure for the past five years, according to the U.S. Energy Department's Energy Information Administration.
S&P Global forecasts an ongoing increase in offtake to 3.9 bcm for the week through January 26, though this is also much less than the normal figure for this time of year.
The EIA currently expects UGS stocks to drop by 60 bcm 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.