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FSUOGM COMMENTARY FSUOGM Source: BBC.
supplies likely explained the 25 mcm per day reduction in flow via the Nord Stream between June 1 and 12.
Fourthly, Russian sanctions on the part- ly-Polish controlled Yamal-Europe pipeline in mid-May meant that the pipeline, which had been only flowing Russian gas westwards spo- radically since September 2021, could not be used at all.
Fifthly, there was a reduction in gas flow via Ukraine. Of the 109.6 mcm per day of transit capacity allotted to Gazprom in Ukraine, around 32.6 mcm per day was at the Sokhranivka entry point, and 77 mcm per day at the Sudzha entry point. On May 10, Ukraine’s transmission sys- tem operator GTSOU declared a force majeure on transit via the Sokhranivka point, citing Rus- sian military occupation of the area and reports of unauthorised local offtake.
GTSOU notes that while only 77 mcm per day of transit capacity was allotted to Gazprom at Sudzha, the route is capable of handling much greater volumes. As recently as December 2022, it was used to flow 160 mcm per day, indicating that Gazprom could have diverted all flow to that route. Nevertheless, Gazprom used the opportu- nity to reduce its capacity booking via Ukraine to only 77 mcm per day.
Finally, Gazprom reduced Nord Stream’s flow to 100 mcm per day in mid-June, stating that only three of the eight turbines at the Por- tovaya compressor station were operational. It announced the next day that another turbine had to be taken offline, reducing flow to 67 mcm per day. Eventually it was reduced to only 30 mcm per day at the end of July. The coun- tries worst affected by cuts to Nord Stream’s flow have been Germany, the Czech Republic, Slova- kia, Austria and Italy. While Russian imports to those countries peaked at 254 mcm per day on May 4, by the end of July they had slumped to 56 mcm per day.
Outlook for Russian supply and European stockpiling
Sharples notes that it appears unlikely that Russian pipeline gas flow on any route that has been stopped will be restarted, and with the situation at the Por- tovaya compressor station far from clear, he predicts that Nord Stream’s capacity will remain restricted for the rest of summer. In an optimistic outlook, one tur- bine could be returned to the station, restoring Nord Stream’s flow to 65-67 mcm per day, and flow via Ukraine through the Sudzha route could reach the pre-booked capacity level of 77 mcm per day. This would add around 70 mcm per day of Russian gas supply to Europe versus the level on July 31. In a pessi- mistic scenario, however, he warns that flow via both Nord Stream and Ukraine could be halted entirely.
In a middle-ground scenario flow via Nord Stream and Ukraine could remain at the current level, implying that Nord Stream flows 135 mcm per day less in August and September of this year than in the same months last year. Taking into account the reduction or ending of flow via other pipelines into Europe, this implies a loss of 220- 235 mcm per day of Russian supply to central and northwestern Europe over the next two months, compared with the same period in 2021.
Meanwhile, Europe had 72 bcm of gas in stor- age at the end of July, which is 11 bcm shy of the EU target for November 1, representing 80% of storage capacity.
“In supply-constrained July, the EU added 11 bcm of net injections,” Sharples writes. “This needs to be repeated in August, and then net injections in September and October will rep- resent efforts to exceed the target before sea- sonal demand picks up, not just in Europe, but in north-east Asia, where winter demand will provide competition for LNG cargoes.”
“Asitstands,the80%targetremainsachieva- ble, but getting close to full stocks of around 100 bcm (as seen at the start of winter in 2019 and 2020) appears rather unlikely,” he says.™
Week 32 11•August•2022 w w w . N E W S B A S E . c o m
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