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The spot price for gas in Europe has again risen above $400 per thousand cubic meters after falling below that level at the end of last week. It had soared towards $500 before falling back to $355 amid concerns regarding a labor dispute and possible industrial action at LNG plants in Australia.
UKRAINE TRANSIT
Gas Transport System Operator of Ukraine, or GTSOU, has accepted a nomination from Russia’s Gazprom today to transport 41.6 million cubic meters of gas through the country, compared with 41.5 mcm 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 41.6 mcm on August 28, 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 rose slightly on Sunday: wind turbines generated 15% of Europe’s electricity, according to WindEurope data. Wind generation averaged at 10% in August 2022 and 14% in July 2023.
The spot price for gas in Europe rose 11% on Friday: the day-ahead contract at the TTF gas hub in the Netherlands closed at $395 per thousand cubic meters, rising to $402 on Monday morning.
The spread between LNG prices in Asia and those in Europe is little changed. In Asia, the most expensive futures contract for October on the JKM Platts index is $481 per thousand cubic meters, and futures under the LNG North-West Europe Marker are $442 per thousand cubic meters.
EUROPEAN INVENTORIES
Europe continues to pump gas into storage. Current inventory levels in Europe’s underground gas storage facilities are 92.31%, which is 13 percentage points above the average for the same date over the past five years, according to Gas Infrastructure Europe.
Inventories rose 0.19 percentage points during the August 26 gas day, a Saturday. Injection rates are still markedly below the five-year average, but the target level of 90% has nevertheless been reached.
European LNG terminals operated at 56% capacity in July and 48% since the start of August. On a daily basis, LNG imports this month could be at their lowest since 2021.
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 0.5 billion cubic meters for the latest reporting week, which is a third less than the norm for this time of year.
The current level of inventories is 64%, which is 9 percentage points above the five-year average, according to the U.S. Energy Department’s Energy Information Administration.
