26 Apr 2023 10:58

Europe injecting gas into UGS facilities 33% less than usual; Gazprom again requests around 40 mcm for transit via Ukraine

MOSCOW. April 26 (Interfax) - Europe's gas industry has been consistently injecting gas into underground gas storage (UGS) facilities at 33% less than usual for the same period over the past five years, while conservation has assisted the region in creating inventories that are currently 20 percentage points above the five-year average, though the reserves have been diminishing rapidly since the beginning of the injection season.

UKRAINIAN TRANSIT

The Gas Transport System Operator of Ukraine, or GTSOU, has accepted a booking from Gazprom today to transport 40.3 million cubic meters of gas through the country, and the figure was 40.7 mcm yesterday, 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 39.7 mcm on April 26, 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 $456 per thousand cubic meters, with the spot price unchanged.

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 $423 per thousand cubic meters, and futures under the LNG North-West Europe Marker are $397 per thousand cubic meters.

Wind-power generation supplied 16% of Europe's electricity needs last week and 15.7% on Tuesday, 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 58.14%, which is 20 percentage points above the average for the same date over the past five years, according to Gas Infrastructure Europe.

Inventories increased 0.23 percentage points during the gas day for April 24, 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 season for injecting gas 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.