Will Gazprom resume gas supplies via Nord Stream?

On July 11, Russia stopped supplying gas to the European Union (EU) via the key Nord Stream gas pipeline with a capacity of 55 billion cubic meters. m per year due to scheduled repairs. The gas pipeline will not operate until July 21, its operator Nord Stream AG said.

According to the European Network of Gas Transport System Operators (ENTSOG), now the export of Russian gas to the EU is carried out only through the land part of the Turkish Stream, as well as transit through the territory of Ukraine.

On July 11, the transit of 39.4 million cubic meters was agreed on the Ukrainian route. m through the gas measuring station (GIS) “Suja”, reported the official representative of “Gazprom”. This is slightly below the average daily volumes of the last few weeks, which were around 41-42 million cubic meters. m. The contract provides for the daily transit of gas through Ukraine in the amount of 109.6 million cubic meters. m, but since May 11, the country has been rejecting requests for gas transit through the Sokhranivka GIS, citing the fact that it is located on territory not controlled by Kyiv.

Also, due to counter-sanctions from the Russian side, exports to the EU through the Yamal-Europe gas pipeline (capacity – 32.9 billion cubic meters per year) have not been carried out since mid-May.

Since June 14, Gazprom was forced to cut Nord Stream deliveries by 40% due to the fact that Canada did not want to give the Siemens gas-pumping turbine for the gas pipeline to Russia for repair. Only on July 8, Ottawa decided to return the turbine. According to Reuters, citing an informed source, the Canadian authorities made this decision after numerous requests from Berlin. Germany’s dependence on Russian gas at the end of 2021 was estimated at 55%.

The announcement of Canada’s decision to return Nord Stream equipment led to a temporary drop in spot gas prices in Europe. According to the ICE exchange, on the morning of June 11 at the Dutch TTF hub, they fell by almost 12% to $1,620 per 1,000 cubic meters. m. Later, the quotations rose again – up to $1,804 per 1,000 cubic meters. m.

According to the International Energy Agency (IEA), Russia accounts for about 45% of all gas imported by the EU. In 2021, according to the agency, about 155 billion cubic meters were imported from the Russian Federation. m gas. However, in 2022, the volume of Russian exports decreased significantly. As reported by Gazprom, in the first half of 2022, gas exports to foreign countries (including China and Turkey) decreased by 31% to 68.9 billion cubic meters compared to the same period in 2021. m. Gazprom’s gas production decreased by 8.6% during this period to 238.4 billion cubic meters. m. Deliveries to the Russian market remained at the level of 2021, the company reported.

The stoppage of Nord Stream for scheduled repairs was expected, so news about whether Gazprom will receive the necessary equipment for work can be of key importance for the market, noted stock market expert of BKS Mir Investments Igor Galaktionov. “Principal agreements between Germany and Canada seem to have been reached, but specific terms [возврата турбины] not yet clear. A number of players on the gas market preferred to reduce long positions on TTF futures, but there are no stable sales, and prices are gradually recovering,” he noted.

The main issue for the market is not only the return of the engine for “Nord Stream” from Canada, but also the further maintenance of the turbines that are still working, Alexey Grivach, Deputy Director General of the National Energy Security Fund, noted. According to the expert, Canada’s decision to return the equipment does not yet mean general normalization [политического] climate, therefore, in the future, the fate of exports along the “Nord Stream” remains uncertain, even despite the clear favorable signals for the market.

Grivach emphasized that it is not necessary to expect a full resumption of Russian gas exports in the current situation. Galaktionov agrees that the market is skeptical about the possibility of restoring gas exports from the Russian Federation in full, which pushes spot prices up against the background of favorable informational reasons.

Due to the reduction of gas export volumes from the Russian Federation, the EU may not be able to fulfill its plan to fill underground storage facilities by 80% by November 1 (“Vedomosti” wrote about it on June 30). According to Gas Infrastructure Europe statistics, as of July 9 (latest data), storage facilities were 61% full, with 66.5 billion cubic meters of storage. m gas.

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