Europe increasing offtake from UGS facilities; Gazprom requests 41.7 mcm for transit via Ukraine

MOSCOW. March 30 (Interfax) - Falling temperatures are forcing Europe to increase offtake from underground gas storage (UGS) facilities, with consumption reaching a two-week high point, and declining wind-power generation should also affect the rise in gas consumption.

UKRAINIAN TRANSIT

The Gas Transport System Operator of Ukraine, or GTSOU, has accepted a booking from Gazprom (MOEX: GAZP) today to transport 41.7 million cubic meters of gas through the country, and the figure was 42.4 mcm the previous day, data from the GTSOU show.

Capacity was requested only through one of two entry points into Ukraine's Gas Transport System, the Sudzha metering station. A request was not accepted through the Sokhranovka metering station.

"Gazprom is supplying Russian gas for transit through the territory of Ukraine at the volume confirmed by the Ukraine side via the Sudzha metering station at 41.7 mcm on March 30, with booking via the Sokhranovka metering station declined," Gazprom spokesman Sergei Kupriyanov told reporters.

The GTSOU has declared a force majeure with respect to acceptance of gas for transit through Sokhranovka, claiming that it cannot control the Novopskov compressor station. The route through Sokhranovka had provided transit of more than 30 mcm of gas per day.

Gazprom believes that there are no grounds for the force majeure or obstacles to continuing operations as before.

EUROPEAN MARKET

The day-ahead contract for today at the Dutch TTF gas hub in the Netherlands closed at $476 per thousand cubic meters.

A split between LNG prices in Asia and those in Europe has noticeably returned. In Asia, the most expensive futures contract for May on the JKM Platts index is $447 per thousand cubic meters, and futures under the LNG North-West Europe Marker are $428 per thousand cubic meters.

Wind turbines provided 21% of the region's electricity needs on average last week, and the figure was 15.9% on Wednesday, according to WindEurope.

EUROPEAN INVENTORIES

Current inventory levels in Europe's underground gas storage (UGS) facilities are 55.68%, which is 22 percentage points above the average for the same date over the past five years, according to Gas Infrastructure Europe.

Inventories dipped 0.2 percentage points during the gas day for March 28, the highest figure for the past 12 days.

European LNG terminals operated at 63% capacity in February, and the figure has been 58% since the start of March because of French facilities shutting down in protest against pension reform in the country.

U.S. INVENTORIES

The state of gas in UGS facilities in the United States is of increasing importance for the global market, and the country is actively increasing gas exports, primarily to Europe.

Inventories decreased 2 billion cubic meters for the latest reporting week, which is markedly more (at 60%) than the usual figure for this time of the year.

The current level of inventories is around 39%, which is 23 percentage points higher than the average figure for the past five years, according to the U.S. Energy Department's Energy Information Administration. The current level of inventories is close to the highest figure for the past five years.

Freeport LNG, the United States' largest LNG plant, has announced reopening all three liquefaction lines, thereby reducing the excess gas on the U.S. market and boosting supplies of LNG to the global market.

Cr ak

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