Gas consumption from European storage facilities at three-year maximum; Gazprom application for Ukraine is 42.4 mcm
MOSCOW. Jan 12 (Interfax) - Amid another spate of cold weather, gas consumption from underground storage facilities in Europe has reached its highest level since mid-February 2021.
UKRAINIAN TRANSIT
Ukrainian GTS Operator (OGTSU) accepted an application from Gazprom for transportation on Friday for 42.4 mcm, the Ukrainian company reported. Thursday's was the same. Capacities are declared only for one of two entry points into the country's gas transportation system, the Sudzha gas measuring station. The application for transit via the Sokhranovka GIS was not accepted.
The published nomination is technically the maximum possible for this transit point, considering the restrictions imposed by the Ukrainian side.
Gazprom's official representative Sergei Kupriyanov told reporters that Gazprom is supplying 42.4 mcm of Russian gas for transit through Ukrainian territory on January 12 via the Sudzha GIS, as confirmed by the Ukrainian side. "The application for the Sokhranovka GIS was rejected," he said.
OGTSU has declared force majeure on accepting gas for transit through Sokhranovka, since it allegedly cannot exercise operational and technological control over the Novopskov compressor station. Sokhranovka can provide gas transit of more than 30 mcm per day. Gazprom believes there are no grounds for force majeure, and there are no obstacles to continuing work as before.
EUROPEAN MARKET
Current forecasts show January 2024 could be quite cold in Europe, at 1.5 degrees below the seasonal norm and 4 degrees colder than last year. However, the market has already rushed to declare another successful winter season.
The spot gas price in Europe fell an additional 1% on Thursday. The contract for day-ahead delivery at the TTF hub in the Netherlands closed at $351 per thousand cubic meters.
Wind generation in Europe has fallen below normal levels. Wind turbines provided less than 12% of the region's electricity needs on Thursday, the WindEurope association said. In January 2023, wind contributed 16%, and in December 2023, 24%.
There is a noticeable gap in LNG prices in Asia versus Europe. February futures for the JKM Platts index (Japan Korea Marker, reflects the spot market value of cargo delivered to Japan, South Korea, China and Taiwan) are trading at $401; futures for LNG supplied to northwest Europe (LNG North West Europe Marker) are at $349.
RESERVES IN EUROPE
The level of natural gas reserves in Europe is one of the key indicators for the global market.
The current figure reached 81.77%, which is 12 percentage points above the average for the same dates over the past five years, Gas Infrastructure Europe said. Although Europe is actively limiting its use of gas and reserves, current stock levels are already lower than at the same time in 2023 and 2020.
During the gas day on January 10, reserves decreased 0.87 percentage points. This is the most intensive net gas withdrawal over the past 2 years and 11 months, since mid-February 2021. The previous two days, the withdrawal figure was also very high, exceeding the values from 2023 and 2022.
European LNG terminals operated at an average productivity rate of 56% in December 2023; since the beginning of January, their average load has been 51%.
RESERVES IN U.S.
Reserves in U.S. underground gas storage facilities are becoming increasingly important as the country actively increases exports.
The United States continues to withdraw gas from storage facilities. During the last reporting week, gas reserves fell 2 bcm, which is lower than usual for this time of year.
The country's current inventory level is 69%, which is 15 percentage points above the average over the past five years (and above the five-year range), the Energy Information Administration (EIA) said.