European gas prices hit 2M high; Gazprom requests 41.5 mcm transit via Ukraine
MOSCOW. Aug 21 (Interfax) - The spot price for gas in Europe rose to a two-month high on Monday morning, the day-ahead price at the TTF hub rising to $449 per thousand cubic meters due growing labor disputes at LNG plants in the United States and Australia, with industrial action possible from September 2.
UKRAINE TRANSIT
Gas Transport System Operator of Ukraine, or GTSOU, has accepted a nomination from Russia's Gazprom today to transport 41.6 million cubic meters of gas through the country, compared with 41.3 mcm on Sunday, 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 Ukraine via the Sudzha metering station at 41.5 mcm on August 21, with booking via the Sokhranovka metering station declined," Gazprom spokesman Sergei Kupriyanov told reporters.
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 spot price for gas in Europe rose a percentage point on Friday: the day-ahead contract at the TTF gas hub in the Netherlands closed at $383 per thousand cubic meters.
The spread between LNG prices in Asia and those in Europe is little changef. In Asia, the most expensive futures contract for October on the JKM Platts index is $498 per thousand cubic meters, and futures under the LNG North-West Europe Marker are $465 per thousand cubic meters.
Wind power generation in Europe are at normal levels for the time of the year: wind turbines generated 9% of Europe's electricity on August 20, according to WindEurope data. Wind generation averaged at 10% in August 2022 and 14% in July 2023.
EUROPEAN INVENTORIES
Europe continues to pump gas into storage. Current inventory levels in Europe's underground gas storage facilities are 91.05%, which is 13 percentage points above the average for the same date over the past five years, according to Gas Infrastructure Europe.
Inventories rose 0.31 percentage points during the August 19 gas day, a Saturday. Injection rates are still markedly below the five-year average, but it will still be possible to achieve the target level of 90% in the coming days.
European LNG terminals operated at 56% capacity in July and 48% since the start of August. On a daily basis, LNG imports this month could be at their lowest since 2021.
U.S. INVENTORIES
Gas inventories in UGS facilities in the United States are of increasing importance for the global market, as the country is actively increasing gas exports.
The U.S. gas injection season continues. Inventories increased by 1 billion cubic meters for the latest reporting week, which is a third less than the norm for this time of year.
The current level of inventories is 64%, which is 11 percentage points above the five-year average, according to the U.S. Energy Department's Energy Information Administration.