Page 108 - RusRPTAug21

Matthias Warnig, CEO of Nord Stream AG, told German’s Handelsblatt newspaper on June 12 that the Nord Stream 2 gas pipeline is 98% complete. “We expect the construction work to be completed by the end of August,” he said in comments published on Sunday. Warnig predicted the pipeline will become operational this fall.
On Monday 5 July, the TTF one-day-ahead prices in Europe reached $464/kcm, according to Bloomberg data. In the first week of July, the Yamal-Europe pipeline through Poland is to be stopped for a week for routine maintenance. Separately, on Monday, according to Interfax, the long-term auctions (for the year starting 1 October 2021) for gas transportation capacity were held. The Ukrainian operator offered 9.8mcm/d (in addition to the 40bcm/a, or 109mcm/d, under the existing transit contract with Gazprom). Poland’s operator offered 79mcm/d of Yamal-Europe’s capacity. The capacity was not booked, meaning it will have to be purchased at the quarterly or monthly auctions. The TTF price has reached yet another high (see our Morning Comment of 22 June 2021) and now stands at levels rarely observed over the last decade. The annual maintenance at Yamal-Europe (35bcm) and Nord Stream (55bcm, 13-23 July) had been announced earlier, so does not come as a surprise for the gas market, although this might have contributed to the sustained growth in spot gas prices. The development is positive for Gazprom, as well as for Novatek. The JKM futures-based benchmark is now on par with European prices, at $463/kcm ($13.11/mmbtu), which might incentivise LNG inflows into Europe, in our view, and cool the spot market prices down a bit.
Serbian company Srbijagas and Hungarian FGSZ connected sections of the TurkStream pipeline on July 4, connecting the two countries’ gas networks. The new section will allow Russia to transfer its gas to Hungary across the Black Sea, bypassing the territory of Ukraine.
Around 15 kilometers of pipeline is being constructed in Hungary for the interconnector, at a cost of about HUF 20bn ($67.5mn), Ferencz said. Once completed the interconnector will have a capacity of 6bn cubic meters per year.
Expansion of the gas connector to a capacity of 8.5bn cubic meters per year was postponed from October 2022 to October 2023, as Hungarian gas workers and officials feared US sanctions.
The Serbian Stream project marks yet another move by Russia to reduce the amount of gas transported through Ukraine. Both the Balkan and Turkish stream projects have drastically reduced the volume of gas. In 2020, almost all gas supply to Bulgaria
and Greece was supplied through the new Turkish Stream pipeline, avoiding the existing “Soyuz” and “Brotherhood” pipelines that intersect Ukraine.
According to estimates, Ukraine will lose about $450mn per year over the launch of the TurkStream gas
108 RUSSIA Country Report August 2021 www.intellinews.com