Gazprom books fraction of gas transit capacity via Poland, ignores Ukraine

Yamal pipeline [Gazprom]

Russian gas giant Gazprom has booked about a third of offered additional gas transit capacity via the Yamal-Europe pipeline via Poland for November and has not booked any volumes via Ukraine, auction results showed on Monday (18 October).

Gazprom’s data also showed its gas exports declined in the first half of October from the same period in September.

The auction results are closely watched as Europe has been eagerly awaiting more gas supplies, especially from Russia, as it tackles skyrocketing natural gas prices, boosted by tight supplies and economic recovery.

According to the auction platform, Gazprom has booked some 32 million cubic metres per day, or 35% of total additional capacity, offered by the Polish operator Gas System for transit via the Kondratki transit point for the Yamal-Europe pipeline for November.

The Yamal pipeline brings Russian gas to Poland and further West via Belarus.

In the context of skyrocketing gas prices and calls for Russia to supply more gas to the EU, Russian President Vladimir Putin recently appeared to exclude Ukraine as a transit country for such additional supplies.

Russian gas transit via Poland has almost halted

Russian natural gas transit via the Yamal-Europe pipeline, which traverses Poland, has almost dried up, Interfax cited gas pipeline operators as saying on Monday (25 May), days after a gas transit deal between Moscow and Warsaw expired.

Gazprom and Ukraine agreed a five-year deal on Russian gas transit to Europe at the end of 2019 after prolonged talks, complicated by political tensions between the two former Soviet republics.

The Russian company has the right to book extra transit capacity in addition to already agreed volumes. It has mostly refused to buy significant spare capacity via Ukraine this year.

Putin says Ukraine gas pipeline system can ‘burst’ at any time

In the context of skyrocketing gas prices and calls for Russia to supply more gas to the EU, Russian President Vladimir Putin appeared to exclude Ukraine as a transit country for such additional supplies. However, he said Russia would fully comply with its present contractual obligations for the transit of gas through Ukraine to Europe.

Ukraine’s pipeline operator said on Friday that Russia is sending less gas to Europe via Ukraine than specified in the current transit contract.

Analysts have said that Gazprom has not booked larger volumes in a move to push for the Nord Stream 2 gas pipeline, which is awaiting regulatory clearance from Germany to start gas exports.

The Swiss-based operator of Nord Stream 2 said earlier on Monday that it had filled the first line of the pipeline with “technical” gas.

Russia’s message appears to be that if the EU wants more gas and a return to normal prices, the solution is Nord Stream 2.

Kremlin: Nord Stream 2 start will help cap gas prices in Europe

A rapid startup of the Nord Stream 2 gas pipeline from Russia to Germany could help calm record-high gas prices in Europe, Kremlin spokesman Dmitry Peskov told reporters, as Moscow awaits for regulatory clearance for gas flows to begin.

The head of Ukraine’s gas pipeline operator confirmed Gazprom has refused to book any additional transit.

“Gazprom’s statements about the first line of Nord Stream 2 being filled with gas is a direct hint that Europe may get additional volumes only via NS2. The blackmail goes on,” Sergiy Makogon said.

Yuriy Vitrenko, head of Ukraine’s state energy company Naftogaz, also accused Gazprom of deliberately not supplying additional volumes of gas to Europe.

Both the Kremlin and Gazprom have repeatedly said Russia meets all requests for gas supplies from European customers.

Ukraine needs to remain a gas transit country not only for the sake of the transit fees, but as an insurance for its territorial integrity.

The Brief, powered by GIE — Pipeline politics for dummies

It’s not easy to make sense of the thousands of stories about Nord Stream 2. To make it simple, Russia and Germany want the pipeline, while Ukraine, Poland, and the US are against it. But why should Ukraine, Poland, the US and others meddle into what looks like bilateral business?

Exports

Separately, Gazprom has presented its gas exports and production data from the start of the year.

According to Reuters calculations, based on this data, Gazprom’s gas exports outside of the former Soviet Union declined to 6.5 billion cubic metres (bcm) on Oct. 1-15 from 7.3 bcm in the month-earlier period.

Alexei Grivach of the National Energy Security Fund, a pro-Kremlin think tank, said Gazprom had to focus on domestic gas market as the heating season in the European part of Russia began in mid-September, two weeks before the usual period.

“In addition to that, gas should still have gone to the domestic underground storages as this process had been complicated by an abnormally high for this time of the year demand from power generation in summer,” he said.

He also said that gas demand in Europe has fallen amid high prices.

According to Gazprom, its domestic gas supplies from the start of the year have jumped by almost 17%.

On the whole, Gazprom said its gas exports from year-to-date increased 13.1% year on year to 152.2 bcm. Its gas output for the period had risen to 399.4 bcm, up 16.6% year on year.

According to Gazprom, its gas supplies rose on 1 January – 15 October to Turkey (125.3%), Germany (28.2%), Italy (16.3%), Romania(288.6%), Serbia (112.1%), Bulgaria (52.7%), Poland (10%), Greece (12.9%) and Finland (15.3%).

(Edited by Georgi Gotev)

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