European countries up gas reserves

Gas storage facilities in Europe are at 75 per cent capacity. Nevertheless, fuel consumption in the region is increasing due to the hot weather, and the level of pumping in underground gas storage is decreasing day by day.

Ukrainian transit

Ukraine's Gas Transmission System Operator (GTSOU)accepted a 41.7 million cubic metres request for June 23 from Gazprom, the Ukrainian company said, Interfax reports.

On June 22, the figure was the same. The capacity is claimed for only one of the two entry points into the country's GTS, the Sudzha gas metering station. No application has been accepted for the corridor through the Sohranovka gas metering station.

"Gazprom is supplying Russian gas for transit through Ukraine in the volume confirmed by the Ukrainian party via Sudzha gas metering station - 41.7 million cubic metres as of June 23. The application for the Sohranovka gas metering system has been rejected," official representative of the monopoly Sergey Kupriyanov informed the journalists.

The GTSOU declared force majeure to receive gas for transit through the Sohranivka, because it allegedly cannot carry out operational and technological control of the Novopskov compressor station. The route through Sohranivka provided transit of more than 30 million cubic metres per day. The Russian concern believes that there are no grounds for force majeure, as well as no obstacles to continue working in the previous mode.

European market

Wind generation output in Europe remains at a low level. On June 22, wind turbines supplied 7.1 per cent of the region's electricity needs, according to WindEurope. Since the beginning of June, the figure has averaged 10 per cent, with wind turbines accounting for 11 per cent of the region's energy consumption in June 2022.

The spot price of gas in Europe lost 10 per cent on June 22. The day-ahead contract at the TTF hub in the Netherlands closed at $385 per thousand cubic metres.

There is a noticeable gap in LNG prices in Asia compared to Europe. August's JKM Platts futures (Japan Korea Marker, reflecting the spot market value of cargoes shipped to Japan, South Korea, China and Taiwan) traded at $431; LNG North West Europe Marker futures traded at $391.

Stocks in Europe

Europe continues to pump gas into storage. The current reserve level is 75.06 per cent, 17 percentage points above the average for the same dates over the past five years, according to Gas Infrastructure Europe.

Reserves increased by 0.18 percentage points in the June 21 gas day. That was the lowest in almost two months (56 days). The pumping rate is still well below normal levels for the past five years. Nevertheless, if this intensity is maintained throughout the summer the target level of 90 per cent of the storage capacity can be achieved by the end of September.

But Gazprom cautions: "It may be a non-trivial task for the European companies to fill the storage capacities. It will be very difficult to do so given the politically motivated decisions to refuse imports of Russian pipeline gas. Competition for LNG will have a major impact on the amount of gas available on the European market”.

European LNG receiving terminals in May operated at an average capacity of 64 per cent; since the beginning of June, the load was 65 per cent.