Gazprom’s de facto refusal to book additional transit capacities through Ukraine for September provoked a rise in gas prices in Europe to yet another historic high. Analysts interviewed by Kommersant see Gazprom’s move as an attempt to substantiate the need to commission Nord Stream 2. At the same time, some experts associate such a decision with a shortage of gas for export after the accident near Novy Urengoy against the background of increased demands on the domestic market.
For the first autumn month, Gazprom booked only 0.65 million cubic meters per day of additional capacities of the Ukrainian gas transmission system (GTS), or 4% of the volume offered by the GTS operator. This is evidenced by the data of the Hungarian capacity booking system Regional Booking Platform. In total, the company could reserve additional transit in the amount of 15 million cubic meters per day, which it did in previous months. When asked by Kommersant why the company did not book these facilities this time, Gazprom did not answer.
Gazprom’s decision has led to the fact that gas prices in Europe have renewed their next maximum. So, at 18:27 Moscow time, the September futures on the TTF index traded at € 47.9 per 1,000 kWh. In Europe, for several months, gas prices have continued to rise against the backdrop of high demand, record low reserves in UGS facilities (see Kommersant on August 12) and, finally, due to an accident at Gazprom’s production at a plant near Novy Urengoy 5 August. As a result of the accident, gas supplies to Europe via the Yamal-Europe gas pipeline have been cut by about half, or by 25 million cubic meters per day.
Gazprom’s decision not to increase gas supplies to Europe, despite the technical availability of such an opportunity and record high prices, may be related to the company’s goal to demonstrate the importance of Nord Stream 2, believes Dmitry, Senior Director of the Fitch Group for Natural Resources and Commodities Marinchenko.
«It can be assumed that Gazprom is striving to demonstrate that without Nord Stream 2, Europe can face a gas shortage, as well as achieve maximum filling of the pipeline after its launch, ”the expert says.
Gazprom is hinting to Europe about the need to withdraw Nord Stream 2 from the EU’s third energy package, says Stanislav Mitrakhovich, a researcher at the Financial University under the Government of the Russian Federation. According to the 2019 amendments to the EU gas directive, offshore gas pipelines are recognized as part of the intra-European gas network – because of this, Gazprom will probably not be able to fill Nord Stream 2 with its gas by more than 50%. So far, the company’s attempts to free the pipeline from this regulation have been unsuccessful.
The second explanation why Gazprom has booked only 4% of the available volume, according to Mr. Mitrahovic, is the need to satisfy the domestic demand for gas.
«Gazprom now has a priority – pumping gas into Russian UGS facilities, which were influenced by the past cold winter, ”the expert suggests.
At the same time, Stanislav Mitrakhovich notes that 15 million cubic meters make up a small part of the daily export volume.
According to Gazprom, from January to August 15 this year, the company has significantly increased gas exports to a number of European countries, in particular to Germany, by 41.5%. At the same time, in August its average daily supplies to foreign consumers are 9.4% higher than a year ago. However, this growth was influenced, among other things, by a significant increase in supplies to China via the Power of Siberia gas pipeline.
Heiko Lohman, an expert on the German and EU gas markets, notes, on the contrary, that Russian gas supplies to the EU are still at an “extremely low level”.
The German analyst has three possible explanations for this. Thus, Gazprom “uses its power in the European market to keep prices at a high level,” the expert said. The second reason, according to Mr. Loman, may be that the company is putting pressure on Europe to complete the Nord Stream 2 project.
The expert also does not rule out that Gazprom simply cannot supply more: “The company has to fill empty storage facilities in Russia, as well as pump additional volumes to Turkey, which is stipulated by contractual obligations.” In addition, the analyst notes that the consequences of a fire at Gazprom’s production facilities near Novy Urengoy for gas supplies could have been more serious than originally anticipated.
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