Page 8 - EurOil Week 45 2021

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Gazprom expands gas transit via Ukraine

EUROPE RUSSIA’S Gazprom has expanded gas transit Europe? So far we have not received additional
volumes via Ukraine by 54% to 88mn cubic applications for transit,” Makogon wrote on his
Gazprom has not metres per day, said the head of Ukrainian Facebook page. “Moreover, transit is still less
booked additional transmission system operator GTSOU, Sergiy than booked and paid for by Gazprom.”
transit capacity via Makogon, as reported on November 8. But sup- Gazprom has also been limiting gas flow via
Ukraine for months. plies still fall short of the 109 mcm per day of the Yamal-Europe pipeline that runs through
transit contract that Gazprom pays for under its Belarus and Poland, diverting as much supply
ship-or-pay contract with GTSOU. as possible to its Nord Stream and TurkStream
Makogon warned on November 1 that Gaz- pipelines.
prom had reduced gas flows via Ukraine to as Supplies via Yamal-Europe were halted com-
low as 57 mcm per day. While the Russian sup- pletely on October 30 and the pipeline began
plier is meeting supply obligations in its con- flowing gas in reverse to Belarus and Poland
tracts with customers, it has faced criticism from Germany. The pipeline did not resume
for withholding extra volumes to put pressure westbound deliveries until November 4, only to
on the EU to allow Nord Stream 2’s launch by restart eastbound deliveries again on November
driving up prices. 6, according to data published by German trans-
Gazprom has not booked any additional mission company Gascade.
transit capacity via Ukraine for months, beyond Wholesale gas prices in Europe soared on
that stated in its contract. Some observers have November 8 amid continuing uncertainty about
pointed to GTSOU offering unfavourable transit the outlook for Russian supplies. There were
terms, however, and it is also unclear how much hopes that Gazprom might boost flow to Europe
spare production capacity Gazprom has, espe- this week, after finishing stockpiling gas domes-
cially in light of a fire that broke out at a key gas tically. The December gas delivery contract at
processing plant in Siberia in August. the Dutch TTF hub was up almost 10% in early
“Will there be an increase in gas supplies to morning trade on November 8. ™

Gazprom starts filling European storage

EUROPE NATURAL gas prices fell on November 9 after significantly as a result of storage injections
Russia’s Gazprom announced it had begun fill- starting. The company has avoided booking
Gazprom's priority so ing up its gas storage facilities in Europe, which additional transit capacity via Ukraine for much
far has been injecting should help ease the continent’s supply crunch. of this year, and westbound gas deliveries via the
enough gas into its “Gazprom approved and began implemen- Yamal-Europe pipeline have become increas-
domestic facilities. tation of the plan for pumping gas into five ingly intermittent. The pipeline has instead
European underground storage facilities in flowed in reverse, eastbound, for a number of
November,” the company reported via its social days in the last two weeks.
media channels. "We still believe that the drop in pumping
Gazprom has four storage sites in Germany, through the Yamal-Europe pipeline might be
along with another one in Austria, one in Serbia explained by the actual gas requests of European
and one in the Czech Republic. But their utilisa- gas consumers, which could be partially driven
tion is currently unusually low, with as little as by the slightly warmer weather during the last
190,000 cubic metres stored as of October 27, two weeks and elevated gas prices," VTBC said.
according to Gazprom. Analysts at BCS Global Markets (BCS GM)
Gazprom’s priority so far has been injecting added that Gazprom’s injection rates were not
enough gas into its domestic storage facilities impressive, and predicted that gas prices would
ahead of winter – something it is required to do remain elevated until the end of winter.
under Russian law. It previously said it would While Gazprom has faced accusations of
begin supplies to European storage facilities after withholding gas supply from the European mar-
November 8, after stockpiling some 72.6bn cubic ket in order to drive up prices and put pressure
metres (bcm) of gas domestically. on the EU to allow Nord Stream 2’s launch. But it
The December gas delivery contract at the is unclear how much spare production capacity
Dutch TTF hub was down 2.9% at €76.9 ($89)/ the company has. In any case, Gazprom contin-
MWh by around 13:00 GMT on November 9, as ues to meet its contractual supply obligations,
fears of supply shortages this winter eased. while refraining from spot sales. Its export arm
However, analysts at VTB Capital (VTBC) reported on November 8 that it had not sched-
estimated in a research note that Gazprom’s uled any auction at its electronic sales platform
overall gas supplies to Europe have not grown this week. ™

P8 www. NEWSBASE .com Week 45 11•November•2021