Page 11 - EurOil Week 33 2022

EurOil POLICY EurOil

Gazprom warns of winter

price pain for Europe

EU RUSSIA’S Gazprom has warned European start of November, in preparation for winter.
consumers that they face further gas price pain But injecting that extra gas will come at a sig-
Prices could hit $4,000 this winter, as its own supplies to the continent nificant cost – more than $10bn at today’s spot
per 1,000 cubic remain heavily constrained and soaring sum- gas prices.
metres, according to mer temperatures continue to drive up energy While the amount of gas now in storage rep-
Gazprom. demand and hinder hydroelectric dams. resents close to the average for this time of year
In a post on its Telegram, the national gas over the past decade, Gazprom noted on Tele-
supplier said on August 16 that European spot gram that the EU would still need to store some
gas prices could reach as high as $4,000 per 23.8bn cubic metres of gas before the start of the
1,000 cubic metres this winter, basing its state- heating season to reach the level that it had in
ment on what it said were “conservative” esti- stock at the start of the 2019-2020 winter, which
mates. European gas prices spiked at over $2,700 had a cold tail-end. The bloc entered the season
per 1,000 cubic metres briefly during trading with close to 100% storage utilisation.
that day. Besides very low Russian gas supply, Gazprom also revealed its export numbers
the summer heatwave has led to drought, hin- for the year up until mid-August, reporting a
dering the transport of energy commodities 36% year-on-year drop in its supplies to the
along rivers such as coal and causing output at so-called Far Abroad, meaning Europe plus Tur-
hydroelectric dams to slump. It has also led to an key minus countries of the former Soviet Union.
increase in energy demand for cooling. The company delivered only 78.5 bcm of gas to
Compounding these factors, wind power the region, or 44.6 bcm less than in the same
farms across the continent are operating at sig- period of last year.
nificantly below their typical capacity for the The company noted that exports to China
time of year, and French nuclear outages con- continued to grow – something that Russia is
tinue. Norway had to slash gas exports because counting on in the long run to offset declines in
of field maintenance. European sales – but it did not disclose figures.
EU gas storage facilities have now been Gazprom’s production dropped 13.2% in the
filled to close to three quarters of their capacity, first eight and a half months of the year, coming
meaning the bloc is only 5% away from reach- to 274.8 bcm, while demand for gas in Russia
ing its target for storage utilisation of 80% by the slipped 2.3%. ™

Week 33 18•August•2022 www. NEWSBASE .com P11