Gas prices in Europe fell after Gazprom resumed supplies | News from Germany about Europe

Wholesale gas prices in Europe fell on Tuesday, November 9, after reports that the Russian energy giant Gazprom, according to its own data, has launched a plan to increase gas supplies to European storage facilities. The plan and routes for supplying gas to five European underground storage facilities have been approved by Gazprom, according to a statement on the company’s Telegram channel.

Earlier, late in the evening of November 8, Gazprom resumed supplies via the Yamal-Europe pipeline. According to data from Germany, cited by Reuters, the volume of supplied gas rose to its highest level in almost two weeks.

In late October, Russian President Vladimir Putin instructed Gazprom to complete filling Russian gas storage facilities by November 8th. Subsequently, the company was supposed to “begin to gradually increase the volume of gas in underground storage facilities in Europe – Austria and Germany.” At the same time, the head of the Russian state added that the planned supplies “will create a more favorable situation on the energy market in Europe as a whole,” reminds the AFP agency.

Russia is accused of gas blackmail

Europe gets about a third of its natural gas from Russia. At the same time, given the growing demand and the relatively low level of storage capacity, spot gas prices rose significantly in the fall. At the same time, European politicians have repeatedly accused Moscow of using gas supplies to Europe to put pressure on German regulators in order to achieve the earliest certification of the new Nord Stream 2 gas pipeline, laid along the bottom of the Baltic Sea. The Kremlin denies these accusations.

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European Gas Market 2021: Gazprom and Its Competitors

Nord Stream 2 attracted Fortuna

To be or not to be in Europe for the new powerful Russian gas pipeline Nord Stream 2? In 2021, the fate of the Gazprom project and five European financial firms should be finally decided. In an atmosphere of sharply escalated political discussions in the EU, the pipe-laying ship Fortuna in early February resumed laying pipes in the Baltic waters of Denmark, interrupted for more than a year due to US sanctions.

European Gas Market 2021: Gazprom and Its Competitors

“Academician Chersky” has been preparing for a whole year

In early April, the Akademik Chersky began work in the deeper waters of Denmark. This pipelayer left the Far Eastern port of Nakhodka towards the Baltic Sea back in February 2020. But it took him almost a year to undergo modernization in German ports, cruising between Germany and Russia, and to test new equipment several times off the coast of the Kaliningrad region (pictured).

European Gas Market 2021: Gazprom and Its Competitors

Lyubmin expects a doubling of supplies from the Russian Federation

The terminal for receiving 55 billion cubic meters per year along two lines of Nord Stream 2 (in the center of the picture near the coast) in German Lubmin near Greifswald was generally ready by the end of 2019. On the left, on the other side of the water area of a small port, is the receiving terminal of the first Nord Stream, operating since 2011, with the same capacity. Behind, they dismantle a closed GDR-era nuclear power plant and store nuclear waste.

European Gas Market 2021: Gazprom and Its Competitors

Ukrainian transit: download or pay

Regardless of the possible completion of Nord Stream 2, Gazprom pledged to export 40 billion cubic meters annually through Ukraine by the end of 2024 or pay for this booked volume. But in 2021, demand in Europe may be higher due to the cold winter and empty gas storage facilities. However, for pumping additional volumes, Gazprom will have to pay at especially high transit tariffs.

European Gas Market 2021: Gazprom and Its Competitors

Eugal: gas in Germany will not be delayed

The task of Nord Stream 2 is to provide gas not so much to the FRG as to those countries in the center and south of Europe, including Italy, which were previously supplied through Ukraine. This is evidenced by its continuation from Lubmin to the Czech Republic – Eugal. This gas pipeline with a capacity of 55 billion cubic meters per year is also being laid across the Elbe in the picture. The end of the construction of the second line was postponed from January to April 2021.

European Gas Market 2021: Gazprom and Its Competitors

TAP: Azerbaijan supplies southern Europe

In three important for Gazprom countries in southern Europe – Greece, Bulgaria and especially Italy – Azerbaijani gas will continue to compete with Russian gas: in 2021, the Trans-Adriatic gas pipeline TAP was launched. Together with TANAP, it forms the Southern Gas Corridor for deliveries to the EU, bypassing Russia, 10 billion cubic meters from the shores of the Caspian Sea. The picture shows a compressor station near the Greek village of Kipoy.

European Gas Market 2021: Gazprom and Its Competitors

Baltic Pipe: Poland will change supplier

By the end of 2022, another large gas pipeline is to be commissioned in the Baltic: the Baltic Pipe with a capacity of 10 billion cubic meters per year. It is being built with EU support and will supply Norwegian gas via Denmark to Poland, which intends to completely stop purchasing from Gazprom by then. The picture shows the laying of pipes between the mainland of Denmark and the island of Funen.

European Gas Market 2021: Gazprom and Its Competitors

Yamal LNG clearly prefers Europe

Along with pipeline gas, liquefied natural gas (LNG) is increasingly being exported from Russia to the European market. As a result, Novatek became another actual competitor of Gazprom in Europe. Its Yamal LNG facility, which houses these ingeniously designed tanks, chose to ship roughly 90% of its production to European terminals in 2020 rather than Asia.

Author: Andrey Gurkov