Gas storage in Europe falls below record level due to low injection rate; Gazprom requests 41.5 mcm transit via Ukraine
MOSCOW. Sept 18 (Interfax) - A thinning global LNG market is cooling the urge of European players to pump gas into the region's storage facilities. Net injection has been balancing at around zero during the second ten days of September. If at the beginning of the month gas storage reached a record level in percentage terms in the history of the Gas Infrastructure Europe database, now it has dropped to third place, below the highs seen in 2011 and 2019.
UKRAINE TRANSIT
Gas Transport System Operator of Ukraine, or GTSOU, has accepted a nomination from Russia's Gazprom today to transport 41.5 million cubic meters of gas through the country, as 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 September 18, 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
Wind power generation in Europe is back to its usual level for the time of year: wind turbines generated 14.7% of Europe's electricity on September 17, according to WindEurope data. Wind generation averaged at 13.5% in September 2022 and 13% in August 2023.
The spot price for gas in Europe rose 2% on Friday: the day-ahead contract at the TTF gas hub in the Netherlands closed at $402 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 October on the JKM Platts index is $476 per thousand cubic meters, and futures under the LNG North-West Europe Marker are $405 per thousand cubic meters.
EUROPEAN INVENTORIES
The level gas storage in Europe is a key indicator for the global market. The region as a whole continues to pump gas into storage. However, withdrawals are also on the rise and net gas injection has almost reached zero. France is already taking gas out of storage on a net basis.
Current inventory levels in Europe's underground gas storage facilities are 94.41%, which is 10 percentage points above the average for the same date over the past five years, according to Gas Infrastructure Europe.
Inventories inched up 0.1 percentage point during the September 16 gas day, a Saturday. Injection rates are markedly below the five-year average, but the target level of 90% has nevertheless been reached and storage is currently at the highest for this date since GIE records began.
European LNG terminals operated at 50% capacity in August and 52% since the start of September.
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 1.6 billion cubic meters for the latest reporting week, which is 25% below the norm for this time of year.
The current level of inventories is 67%, which is 7 percentage points above the five-year average, according to the U.S. Energy Department's Energy Information Administration.