Gas injection in Europe still below norm despite strong wind generation; Gazprom requests 42.4 mcm transit via Ukraine
MOSCOW. April 21 (Interfax) - A surge in wind power generation in Europe on April 19, when wind turbines provided 126% of Germany's electricity needs, and the spot price for electricity was negative for some time, did not help to correct the situation with the injection of gas into the region's underground storage facilities. The injection rate that day was still a third below the norm for this period in previous years.
UKRAINIAN TRANSIT
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, as on Thursday, 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 42.6 mcm on April 21, with booking via the Sokhranovka metering station declined," Gazprom spokesman Sergei Kupriyanov told reporters.
The published nomination is the highest technically possible for that route, given the restrictions imposed by Ukraine. 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
Wind turbines generated 15% of Europe's electricity on Thursday, down from 20% on Wednesday, according to WindEurope.
This caused the spot price for gas in Europe to rise 2%. The day-ahead contract at the Dutch TTF gas hub in the Netherlands closed at $465 per thousand cubic meters.
The spread between LNG prices in Asia and those in Europe is widening. In Asia, the most expensive futures contract for June on the JKM Platts index is $437 per thousand cubic meters, and futures under the LNG North-West Europe Marker are $412 per thousand cubic meters.
EUROPEAN INVENTORIES
Current inventory levels in Europe's underground gas storage (UGS) facilities are 56.81%, which is 20 percentage points above the average for the same date over the past five years, according to Gas Infrastructure Europe.
Inventories rose 0.19 percentage points during the April 19 gas day, noticeably less than the five-year average./
Gazprom warns that "replenishing gas reserves in storage facilities could be a non-trivial task for European companies. This will be very difficult to do, given the politically motivated decisions aimed at refusing to import Russian pipeline gas. Competition for LNG will have a big effect on the volumes of gas available on the European market."
European LNG terminals operated at 58% capacity in March due to strikes at terminals in France, but 63% since the start of April as most of the terminals operated by Elengy went back to work.
U.S. INVENTORIES
The state of gas in UGS facilities in the United States is of increasing importance for the global market, as the country is actively increasing gas exports. Freeport LNG, the largest U.S. LNG plant, has announced reopening all three liquefaction lines, thereby reducing the gas surplus on the U.S. market and boosting supply of LNG to the global market.
The U.S. has begun its gas-injection season into UGS facilities, about a week later than usual.
Inventories decreased 2.1 billion cubic meters for the latest reporting week, roughly twice as much as for this time of year.
The current level of inventories is around 40%, which is 21 percentage points above the five-year average, according to the U.S. Energy Department's Energy Information Administration.