Russian gas supplies to Europe jump
Russian gas supplies to Europe via the Velke Kapusany entry point on the on the border of Slovakia and Ukraine were nominated to jump to over 200 million cu m Tuesday. S&P Global Platts Analytics reports in its article Russian gas supplies to Europe jump as Nord Stream works kick-in that the quick ramp-up in Russian gas supplies is offsetting shortages due to the annual Nord Stream maintenance which is taking place from July 16-30, cutting the flows via the pipeline down to zero throughout this period.
The Velke Kapusany flows, nominated at 200 million cu m Tuesday, are set to reach their highest since February 2012, when they last reached 201 million cu m, Platts Analytics data showed. Flows are expected to remain at a steady and robust level until the end of the 55 Bcm/year Nord Stream gas pipeline works on July 30. "Historically, during the Nord Stream maintenance we have seen flows via Velke Kapusany pick up to an average of over 180 million cu m/d. However, on the first day of NS works this year, flows via this point have been nominated at a level not seen since 2012, with full firm capacity of 189 million cu m/d, as well as another 22 million cu m/d of interruptible capacity, being utilised. Given such strong flows via the Ukrainian transit route, another 7 million cu m/d of available Mallnow capacity, as well as strong stocks in Gazprom's storage sites in Europe, we are unlikely to see a lasting impact on TTF because of Nord Stream works during this period," Platts Analyst Ornela Figurinaite said.
"Russian flows are very high, they are compensating for the Nord Stream outage," a Germany-based trader said. A Dutch gas trader said: "These flows were the wildcard on the table or up a Russian sleeve to try to compensate." The ramp-up in nominations appeared to ease any potential bullish sentiment on the Dutch TTF hub with the market trending downward since the market opened Tuesday. "So yesterday around 1300 GMT Aug TTF was at Eur13.95/MWh and now it is trading at Eur11.90/MWh," the Dutch trader said.
The Nord Stream works are however expected to continue to lend support to European gas contracts with the ramp-up in Velke flows only partially offsetting the summer maintenance works. Healthy storage levels are also helping alleviate the undersupply. "If you see how to balance the system now storages are taking the remaining part. I was sure LNG could increase send-out but [there's] nothing from there," an Italian gas and power analyst said.
Withdrawals at the natural gas storage facility at Rehden in Northern Germany were nominated at almost 62 million cu m Tuesday, the data showed. On Monday storage injections stood at only 12.6 million cu m. "The impact is: GASPOOL is trading at a premium to TTF. Because Velke can't compensate 100% the spot market is a little bit undersupplied. We see it in the premium to month-ahead. Spot will follow the curve, but it is trading at a premium," the German gas trader said.
The day-ahead contract on the German GASPOOL hub jumped 70 euro cent to Eur13.375/MWh Monday, the highest since mid-May, Platts pricing data showed. GASPOOL's day-ahead premiumover the TTF hub reached 37.5 euro cent. On Friday, TTF was trading at a 27.5 euro cent premium to GASPOOL.