Europe's UGS reserves exceed 60%, application to Gazprom for gas transit via Ukraine rises to 40.9 mcm
MOSCOW. May 3 (Interfax) - The level of gas reserves in Europe's underground storage facilities exceeds 60%, according to Gas Infrastructure Europe.
This is a high figure, but by no means a record. On this day in 2020, it was three points higher at 63.11%.
The low consumption of gas reserves over the past winter is the result of relatively mild weather and reduced industrial demand. The success of the summer campaign to restore gas reserves in UGS facilities depends on how high the air temperature will be, as well as on LNG availability on the world market.
UKRAINIAN TRANSIT
The Gas Transmission System (GTS) Operator of Ukraine, or OGTSU, accepted an application from Gazprom for Wednesday for 40.9 mcm, the Ukrainian company said. The Tuesday application was 39.8 mcm. Capacities are declared only at one of two entry points to the country's GTS, the Sudzha gas measuring station. The application was not accepted for entry via Sokhranivka station.
Gazprom's official representative, Sergei Kupriyanov, told reporters that Gazprom is supplying Russian gas for transit through Ukraine in the amount confirmed by the Ukrainian side through the Sudzha GIS of 40.9 mcm on May 3. The application for the GIS in Sokhranivka was rejected."
The OGTSU has declared force majeure for the acceptance of gas for transit through Sokhranivka, as it allegedly cannot exercise operational and technological control over the Novopskov compressor station. The route through Sokhranivka used to ensure the transit of more than 30 mcm per day. The Russian company believes that there are no grounds for force majeure, just as there are no obstacles to continuing to operate as before.
EUROPEAN MARKET
Wind power generation in Europe remains modest. Over the past week, windmills provided 13% of the region's electricity needs; on Monday and Tuesday, their contribution was also the same on average, according to the WindEurope association.
The spot gas price lost 3% on Tuesday. A day-ahead delivery contract at the TTF hub in the Netherlands closed at $426 per 1,000 cubic meters.
There is a widening gap in LNG prices in Asia compared to those in Europe. June futures on the JKM Platts (Japan Korea Marker, reflects the spot market value of cargo shipped to Japan, South Korea, China and Taiwan) are trading at $410; futures for LNG supplied to northwest Europe (LNG North West Europe Marker) are at $342.
RESERVES IN EUROPE
Europe continues pumping gas into its storage facilities. The current level of gas reserves is 60.16%, which is 20 percentage points higher than the average for the same dates over the past five years, according to Gas Infrastructure Europe.
During the gas day on May 1 (a holiday), reserves were increased 0.35% percentage points. Injection rates are still noticeably below the usual levels over the past five years.
Gazprom has warned that "replenishing gas reserves in storage facilities could be a not-so-easy 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 impact on the amount of gas available on the European market."
In April, European LNG receiving terminals operated with an average capacity of 67% on the first day of May, while loading was at 65%.
U.S. STOCKS
The status of UGS 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 liquefaction lines. This reduces excess of gas in the local market and increases the worldwide supply.
The United States has opened the season for gas injection into its UGS facilities - it was delayed nearly one week.
During the next reporting week, reserves increased by 2.2 bcm - this is about twice the usual for this period. The current level of inventories is at 42%, which is 22 percentage points higher than the average over the past five years, according to the U.S. Depart of Energy's Energy Information Administration.