Page 26 - RusRPTAug22

However, the key markets of Czechia (77.7%), Slovakia (68.3%), Italy (70.5%) and Hungary (49.2%) that are most exposed to Russian gas supplies still have some way to go.
Ukraine has the most to do with the lowest storage levels in Europe of only 22.9% and also has by far the largest storage facilities in Europe as the traditional warehouse of winter gas supplies. In a controversial move, Ukraine’s government has ordered the state-owned gas company Naftogaz to ask its bondholders to voluntarily delay coupon payments to free up cash to buy more gas. The company needs to buy an estimated 5bcm worth some $7.8bn and it remains unclear where Naftogaz will get both the money and the gas from.
Even if the 80% goal is reached by October 1 and the second goal of 90% by November 1, Europe will still need more imports from Russia over the rest of winter as only Slovakia and Austria have enough gas storage capacity to get through the whole winter without more exports.
The IMF warned that in a worst-case scenario of a total cut off of Russian gas the most exposed economies could see GDP contract by up to 6% and key markets like Germany and Italy would see a contraction of between 2% and 3%. Most of Europe is headed into recession by the end of this year anyway due to multiple problems caused by Russia’s war in Ukraine and looming stagflation.
The lack of gas and sky high prices that have risen to $1,800 per thousand cubic metres – ten times the normal level – have already done a lot of damage. Germany’s biggest energy company Uniper, and the biggest importer of Russian gas in Europe, has already been forced to ask the German government for a bailout as what it can charge consumers is fixed by law, although that may change if Russia continues to restrict gas flows. The French government has also announced plans to nationalise its energy champion Gas de France (EDF) which is having similar problems, by buying back the 16% of the company it does not already control for €8bn.
Reduced flows
At 20% of capacity, or 33 million cubic metres per day (mcmpd) Europe will be able to refill storage to only 75%-80% ahead of winter, Wood Mackenzie consultancy told Reuters. For the previous month and a half since June 15 (excluding the scheduled 10-day maintenance break), Nord Stream has operated at 40% capacity, or 66mcmpd. Nord Stream 1 name plate capacity is around 165mcmpd.
"As a result, Europe is likely to get through the heating season with only 20% gas in store at the end of March – a very low level," Kateryna Filippenko, Principal Analyst, Global Gas Supply, at Wood Mackenzie said. In 2021/2022 Europe finished the heating season with tank storage at 26% - the lowest level in years.
26 RUSSIA Country Report October 2020 www.intellinews.com