Weak wind generation in Europe limits gas flows into underground storage, Gazprom transit order via Ukraine reaches 40.8 mcm
MOSCOW. April 17 (Interfax) - Weak wind generation in Europe is limiting the amount of gas that can be pumped into underground storage facilities, as more gas is going to the energy sector despite the seasonal increase in air temperature.
The Gas Transmission System (GTS) Operator of Ukraine accepted an application from Gazprom on Monday for 40.8 mcm, the Ukrainian company said. On weekends, when pumping traditionally decreases, the Sunday application was 38.5 mcm. Capacities are declared only at one of the two entry points to the country's GTS, the Sudzha gas measuring station. The application for transit was not accepted by the second, the Sokhranivka station.
"Gazprom is supplying Russian gas for transit through Ukraine in the amount of 40.8 million cu. m. through the Sudzha GIS, as confirmed April 17 by the Ukrainian side. The application for the Sokhranivka station was rejected," Gazprom's official representative, Sergei Kupriyanov, said
Ukraine's GTS operator has declared force majeure for accepting gas for transit through Sokhranivka, as it allegedly cannot exercise operational and technological control over the Novopskov compressor station. The route through Sokhranivka once handled the transit of more than 30 million cu. m. per day. Gazprom believes there are no grounds for force majeure, just as there are no obstacles to continuing to work as before.
Electricity generation from wind turbines in Europe by the end of the week had decreased 60% from peak levels in the middle of the week. On Sunday, wind provided 11% of the region's electricity needs, according to the WindEurope association.
Just prior to the weekend, the spot price of gas is traditionally corrected. A day-ahead delivery contract at the Title Transfer Facility hub in the Netherlands closed at $473 per 1,000 cu. m.
There is a noticeable gap in LNG prices in Asia compared to Europe. May futures on the JKM Platts (Japan Korea Marker, which reflects the spot market value of cargo shipped to Japan, South Korea, China and Taiwan) is trading at $450; futures for LNG supplied to northwest Europe (LNG North West Europe Marker) are trading at $432.
RESERVES IN EUROPE
Europe continues pumping gas into storage facilities. The current level of gas reserves is 56.32%, which is 21 percentage points higher than the average for the same dates over the past five years, according to Gas Infrastructure Europe (GIE).
During the gas day on April 15 (a day off), reserves increased 0.15 percentage points. During the previous workdays, the pace of inflows was much more modest.
European LNG terminals operated at an average capacity of 58% in March due to a strike at French terminals. Since the beginning of April, the load has risen to 61%. The bulk of French terminals operated by Elengy are slowly returning to service.
The status of underground gas reserves in the United States is becoming increasingly important for the global market, as the country is actively increasing exports. America's largest LNG plant, Freeport LNG, has resumed operation of all three of its liquefaction lines. This reduces the excess of gas in the US market and increases supplies in the world market.
During the next reporting week, reserves decreased by 0.7 billion cu.m., whereas by this time, the extraction of gas from storage facilities has usually stopped.
The current level of inventories is 38%, which is 19 percentage points higher than the average over the past five years, according to the Energy Information Administration (EIA) of the US Department of Energy.