27 Feb 2023 13:55

Colder weather in store for Europe this week; Gazprom requests 41.4 mcm for transit via Ukraine

MOSCOW. Feb 27 (Interfax) - The weather in Europe this week will be colder than in the previous two weeks. The temperature for the week February 27-March 5 is forecast to be about 3 degrees cooler than the average for the previous week and to drop below zero at night.


The Gas Transport System Operator of Ukraine, or GTSOU, has accepted a booking from Gazprom today to transport 41.4 million cubic meters of gas through the country, while the previous day it was 39 mcm, 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 41.4 mcm on February 27, 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.


The drop in the temperature and in wind generation have boosted gas prices - they rose 5% by the end of the week. The day-ahead contract for today at the Dutch TTF gas hub in the Netherlands closed at $568 per thousand cubic meters on Friday.

The spread between gas prices in Asia and LNG prices in Europe, is again noticeable. In Asia, the most expensive futures contract for March on the JKM Platts index is $535 per thousand cubic meters, and futures under the LNG North-West Europe Marker are $487 per thousand cubic meters.

Wind turbines provided only 16% of the region's electricity needs last week, as a week previously.


Current inventory levels in Europe's underground gas storage (UGS) facilities have declined to 62.45%, which is 22 percentage points above the average for the same date over the past five years, according to Gas Infrastructure Europe. Inventories contracted 0.22 percentage points during the gas day for February 25.

The relatively mild weather in October, November and 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 operated at 62% capacity in January, and have averaged 63% in February.

There has been an increase in regasification volumes since the middle of last week, mainly due to France and Poland.


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.

Mild weather has reduced the flow of gas from U.S. storage facilities. Stocks decreased 2 billion cubic meters for the latest reporting week ending February 17, 2023, which is 60% less than usual for the time of year.

The current level of inventories is around 46%, which is 15 percentage points higher than the average figure for the past five years, according to the U.S. Energy Department's Energy Information Administration. Current inventor is almost at a five-year high.

Freeport LNG, the United States' largest LNG plant, has announced reopening two of its three liquefaction lines, thereby reducing the excess gas on the U.S. market and boosting supplies of LNG to the global market.

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 five-year average.