European gas offtake reaches highest level in past month; Gazprom requests 32.6 mcm for transit via Ukraine

KYIV. Jan 18 (Interfax-Ukraine) – Slightly declining temperatures since Monday have resulted in Europe boosting offtake two-fold from underground gas storage (UGS) facilities on the continent.

However, the relatively mild weather in October and November and thus far in January, in addition to the continent’s austerity measures, have resulted in the level of reserves in UGS facilities reaching an all-time high since monitoring began, thereby underpinning the authorities’ confidence in getting through the winter in good shape.

Gazprom’s request for pumping Russian gas through Ukraine has not changed markedly from the previous days and months.

The Gas Transmission System Operator of Ukraine, or GTSOU, has accepted a booking from Gazprom today to transport 32.6 million cubic meters of gas through the country against 32.6 mcm the previous day, data from the GTSOU show.

Capacity was requested only through one of two entry points into Ukraine’s Gas Transmission System, the Sudzha metering station. A request was not accepted through the Sokhranivka metering station.

Prices on the European market have reacted to the dipping temperatures. The day-ahead contract for today at the Dutch TTF gas hub in the Netherlands has closed at $667 per 1,000 cubic meters, and the February futures contract was $661 per 1,000 cubic meters.

In Asia, the most expensive winter futures contract for February on the JKM Platts index remains substantially higher at $957 per 1,000 cubic meters on the heels of European prices. February futures under the LNG North-West Europe Marker are $854 per 1,000 cubic meters.

Power generation from wind turbines in Europe dipped to 22% yesterday following an average of 29% last week, according to data from WindEurope.

Current inventory levels in Europe’s underground gas storage (UGS) facilities have declined to 81.07%, which is 19 percentage points above the average for the same date over the past five years, according to Gas Infrastructure Europe (GIE).

Reserves contracted 0.41 percentage point during the gas day for January 16, the highest figure for the past 30 days.

However, Gazprom has also warned that, "The load on UGS facilities in Europe will be higher than in previous years owing to the changed logistics and sources of gas supplies to the European market."

European LNG terminals have been operating at 63% capacity since the beginning of January against an average of 67% in December.

Germany opened its second LNG receiving terminal on the Baltic coast at Lubmin over the weekend in addition to the terminal at Wilhelmshaven, though the Netherlands’ recently opened Eemshaven terminal has closed at least until the end of January owing to damage to the heating supply system.

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, primarily to Europe.

The latest reporting week ending January, 6, 2023, witnessed an increase at a symbolic 300 million cubic meters rather than a decrease against an S&P Global outlook of a reduction of 200 million cubic meters. The reason for these unusual figures has been owing to the warm weather and an unexpectedly quick recovery in production after the failure from the cold weather at the end of December.

The current level of inventories is around 60%, which is nearly in line with the average figure for the past five years, according to the U.S. Energy Department’s Energy Information Administration.

The EIA currently expects UGS stocks to drop by 60 billion cubic meters this winter to the average for the last five years. Natural gas volumes in storage facilities should total 40 bcm by the end of March, which would be 8% below the average for five years.