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Gas offtake from European storage facilities above the norm; Gazprom requests 24.4 mcm for transit via Ukraine

KYIV. Jan 25 (Interfax-Ukraine) – Gas offtake from underground storage facilities in Europe has again exceeded the five-year average for the time of year, while the latest forecast for milder weather this week could send spot opries for gas down again

The Gas Transmission System Operator of Ukraine, or GTSOU, has accepted a booking from Gazprom today to transport 24.4 million cubic meters of gas through the country, as on Tuesday, 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.

Power generation from wind turbines in Europe averaged 18% last week, according to data from WindEurope. This fell to 10% on Tuesday, the lowest since the middle of December,

Gas prices in Europe have still fallen due to a milder weather forecast for the week. The day-ahead contract for today at the Dutch TTF gas hub in the Netherlands closed at $670 per 1,000 cubic meters.

The "Asian premium", or the spread between gas prices in Asia and LNG prices in Europe, is steady. In Asia, the most expensive futures contract for March on the JKM Platts index is $790 per 1,000 cubic meters, while futures under the LNG North-West Europe Marker are $594 per 1,000 cubic meters.

Current inventory levels in Europe’s underground gas storage facilities have declined to 77.06%, which is 20 percentage points above the average for the same date over the past five years, according to Gas Infrastructure Europe.

Inventories contracted 0.70 percentage point during the gas day for January 23, the biggest drop since December 14 and the first time since December 16 that net offtake has been higher than the five-year average.

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 being at an all-time high for this time of year since monitoring began, thereby underpinning the authorities’ confidence in getting through the winter in good shape.

European LNG terminals have been operating at 62% capacity since the beginning of January against an average of 67% in December. January LNG imports are down 5% from December.

Germany has opened its second LNG terminal on the Baltic coast at Lubmin in addition to the terminal at Wilhelmshaven, although the recently opened Eemshaven terminal in the Netherlands 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.

The latest reporting week ending January 13, 2023, again saw an unusually low a reduction of 200 million cubic meters owing to the mild weather.

The current level of inventories is around 59%, 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.