Gas prices in Europe have corrected somewhat thanks to the arrival of long-awaited cooler weather.
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The request for transit of Russian gas through Ukraine on Tuesday was little changed from previous days and months.
Ukraine's Gas Transmission System Operator (GTSOU) has accepted a request from Gazprom for Tuesday to transport 42.2 million cubic meters of gas through the country, the same as the previous day, data from OGTSU 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.
OGTSU declared a force majeure in regard to accepting gas for transit through Sokhranovka, claiming that it cannot control the Novopskov compressor station. The route through Sokhranovka provided transit of more than 30 mcm of gas per day.
Gazprom believes there are no grounds for a force majeure or obstacles to continuing operations as before.
The supply of gas through the Nord Stream pipeline (NS1) from Russia to Europe is still down to 33 mcm, and from August 31 to September 2 the pipeline will be shut down completely again for maintenance, news that earlier led to another spike in prices.
At full capacity, NS1 can pump up to 167 mcm of gas per day, but capacity has fallen due to disruptions in the maintenance schedule for compressor equipment at the Portovaya compressor station that feeds the pipeline. It has gas pumping turbines from Rolls-Royce, whose gas turbine business was subsequently acquired by Germany's Siemens.
Due to Canadian sanctions, one turbine was not returned to Russia on time from Siemens Energy's service center in Montreal. Meanwhile, the time has come for maintenance on other turbines, both due to them reaching the end of their operating period between repairs and due to breakdowns.
Spot prices for gas in Europe have been hovering around $3,000 per 1,000 cubic meters since the drop in pumping capacity on NS1. On Tuesday the price for September futures fell to $2,900 from $3,500 last week, as temperatures in Europe dropped to about 20 degrees Celsius.
Prices in Asia have also risen along with those in Europe. The highest priced winter futures, for January, on the JKM Platts (Japan Korea Marker) index, which reflects spot market prices for gas delivered to Japan, South Korea, China and Taiwan, has reached $2,877.
Part of the facilities at Norway's Troll field and Kollsnes gas treatment facilities are shut down for annual maintenance until the end of the month. Gas production capacity has decreased to 20 mcm, and new major shutdowns of Norwegian operations lie ahead.
Wind power's contribution to electricity generation across the EU slipped to 9.3% on Monday from an average of 9.5% last week and 11.4% in August 2021, data from WindEurope show.
European liquefied natural gas (LNG) receiving terminals are operating at an average of 59% of capacity in August compared to 69% in July, data from Gas Infrastructure Europe showed.
Average daily gas deliveries from LNG terminals are down 14% month-on-month in August. Imports of expensive LNG are decreasing, in part due to the gradual achievement of the necessary reserve level in European storage.
New challenges for gas supplies to Europe could be ahead. The hurricane season in the Gulf of Mexico has begun and it usually peaks from mid-August to mid-November, which could hinder U.S. LNG exports. The latest forecasts for the season indicate that stronger hurricanes than usual are likely.
Europe is continuing to inject gas into underground gas storage (UGS) facilities. Data on the state of UGS, reserve levels in which are now regulated by the law, have become one of the most important economic and political indicators for Europe, reflecting EU leaders' ability to ensure energy security.
Europe imposed tight regulation of the use of UGS this year. Reserves are supposed to be at least 80% of UGS capacity by November 1, 2022 and increase to 90% in subsequent years.
The average level of gas reserves in UGS in Europe has actually already reached 80% of capacity. Reserves in Europe's UGS facilities reached 79.94% on August 28, according to data from Gas Infrastructure Europe. This means that the threshold of 80% was reached on Tuesday morning.
Reserves in storage have now surpassed the target level in Belgium, the Czech Republic, Denmark, France, Germany, Italy, Poland, Portugal and Spain.
Meanwhile, Austria, Bulgaria, Croatia, Hungary, the Netherlands and Latvia are lagging, with the latter in the rear with 55% as it stopped injecting gas into its Incukalns storage facility in mid-August. ■