Latest cold snap in Europe could complicate injecting gas into UGS facilities; Gazprom requests 40 mcm for transit via Ukraine
MOSCOW. April 24 (Interfax) - Injecting gas into Europe's underground gas storage (UGS) facilities in April is substantially behind the regular pace for this time of the year.
European gas companies do have a relatively large head start at an excess of 20 percentage points over the average level for the same days last year. EU countries are also actively conserving fuel, especially in gas-intensive industries. Nevertheless, the flow of gas through pipelines to the region has decreased significantly.
The cold weather will not likely favor the active accumulation of inventories from the start of the new week.
UKRAINIAN TRANSIT
The Gas Transport System Operator of Ukraine, or GTSOU, has accepted a booking from Gazprom today to transport 40 million cubic meters of gas through the country, and the figure was 42.4 mcm on Friday, dipping below 40 mcm as usual during the past weekend, 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 40 mcm on April 24, 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
The day-ahead contract for today at the Dutch TTF gas hub in the Netherlands closed at $459 per thousand cubic meters, with the spot price declining 1% on Friday.
A split between LNG prices in Asia and those in Europe has noticeably returned. In Asia, the most expensive futures contract for May on the JKM Platts index is $424 per thousand cubic meters, and futures under the LNG North-West Europe Marker are $412 per thousand cubic meters.
Wind-power generation in Europe supplied 16% of the region's electricity needs last week, a rise from 18% during the week of April 10-16, according to WindEurope.
EUROPEAN INVENTORIES
Europe has officially started and continues the gas-injection season into underground gas storage (UGS) facilities. Current inventory levels in Europe's UGS facilities are 57.6%, which is 20 percentage points above the average for the same date over the past five years, according to Gas Infrastructure Europe.
Inventories increased 0.31 percentage points during the gas day for April 22, with Aprils pace markedly lagging the usual injection levels over the past five years.
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 an average capacity of 58% in March owing to a strike at French terminals, and the load has been 65% in April thus far. The bulk of French terminals operated by Elengy are gradually returning to service.
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.
Freeport LNG, the United States' largest LNG plant, has announced reopening all three liquefaction lines, thereby reducing the excess gas on the U.S. market and boosting supplies of LNG to the global market.
The U.S. has begun the gas-injection season into UGS facilities about a week later than usual.
Inventories rose 2.1 billion cubic meters for the latest reporting week, which is about double the usual figure for this time of the year.
The current level of inventories is around 40%, which is 21 percentage points higher than the average figure for the past five years, according to the U.S. Energy Department's Energy Information Administration.
