Gazprom transit request via Ukraine 42.5 mln cubic meters on Oct 11

MOSCOW. Oct 11 (Interfax) – The Gas Transmission System Operator of Ukraine, or GTSOU, has accepted a booking from Gazprom today to transport 42.4 million cubic meters of gas through the country, as on Monday, 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 the Ukraine side via the Sudzha metering station at 42.5 mcm on October 11, 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. Ukraine has also said that if gas continued to be fed from Russia to the Sokhranovka station, amounts would be reduced accordingly at the exit points from Ukraine’s gas transport system. The route through Sokhranovka had provided transit of more than 30 mcm of gas per day.

Gazprom believes there are no grounds for the force majeure or obstacles to continuing operations as before.

European market

The Indian summer continues in Europe, where the spot price – the day-ahead contract at the TTF hub in the Netherlands – fell as low as $855 per thousand cubic meters at one stage last week but is now up to $1,010. The October futures contract is $1,595 and the February contract is $1,802. In Asia, the most expensive winter futures contract for February on the JKM Platts index is now $1,408.

The Nord Stream pipeline is completely shut down due to problems with equipment maintenance caused by sanctions. In addition, last week two strings of Nord Stream 1 and one of Nord Stream 2 depressurized near the Danish island of Bornholm.

European liquefied natural gas terminals operated at an average of 59% of capacity in September, as in August, rising to 61% so far in October, data from Gas Infrastructure Europe indicate.

Wind turbines generated 17.8% of the EU’s electricity on average on Monday and 18.6% last week, according to data from WindEurope.

European gas inventories

Europe continues to inject gas into underground gas storage facilities, with the average level of reserves reaching the targeted 80% at the end of August, since when the pace of injection has slowed. The European UGS facilities usually transition from net injection to net withdrawal around October 20.

Inventories in UGS facilities have risen to 91.18%, up 0.3 percentage points from October 9, the last reporting date, according to Gas Infrastructure Europe data.

Gas inventories in UGS facilities currently exceed 80% in Austria, Belgium, the Czech Republic, Croatia, Denmark, France, Germany, Italy, the Netherlands, Poland, Portugal, and Spain.

Bulgaria, Hungary, and Latvia are lagging. It should take Bulgaria should reach the 80% target this week but it will take Hungary longer.

Gas stocks at the Incukalns UGS facility in Latvia are the lowest in the EU and are stuck at around 54%. This UGS facility is responsible for reserve gas supplies to Estonia, Latvia and Lithuania, as well as Finland.

U.S. inventories

The situation with gas injection in the U.S. has improved. Air conditioners are being turned off and there is no immediate demand for heating, allowing more gas to be injected into UGS facilities. UGS facilities are filling also because the Freeport LNG terminal has halted exports following an accident and thanks to a 17-day stoppage at the Cove Point plant for scheduled maintenance.

The rate of injection increased during the last reporting week, with 3.6 bcm stored, up from 2.9 bcm in the previous two weeks.

The current inventory level is around 64%, which is substantially below inventory at UGS facilities in Europe, with the EU having topped this level a month and a half ago; and in Russia, which has over 90%.

UGS inventories in the U.S. are now only 7.4% above the five-year minimum, according to the U.S. Energy Department’s Energy Information Administration. Current inventory lags 8% behind the five-year average.