Europe gas market -how it started how its going

[Eric Gagen + 713]

On 1/27/2022 at 7:07 PM, Tomasz said:

Did the Soviet Union ever stop shipping gas to Western Europe, even during the greatest crises of the Cold War?

NO

Anyway, Russia has very good relations with Germany and especially France and Italy.

Last year, 29 Novatek's gas tankers supplied LNG to the UK.

The only problem is that the USA has a big problem because your LNG from the USA is much more expensive than Russian gas.

The US is already really doing all the ways to force Europe to buy its expensive gas.

Only that Europe knows well how to calculate what it cost and which one is cheaper.

if Russia did not have nuclear weapons, the US would have imposed sanctions on Russia on gas exports a whole long time ago.

As are sanctions on the oil sectors of Iran and Venezuela.

The USA simply doesn't like competition to its businessmen.

And the interests of Europe would be deeply respected by the ground that exports from the USA would increase because this is the problem that the USA has fewer and fewer products at the price that  someone wants to buy.

I hate to break this to you, but long term the US has no significant interest in selling natural gas to Europe.  Ironically it's for the same basic reasons the Russians aren't selling to them either.  European buyers consistently want to buy 'spot' cargoes or sign short term contracts, and US LNG suppliers have a lot of gas for sale - they want long term contracts, and for those, they have mostly been selling to Asia.  US LNG that doesn't get sold on long term contracts to Asia mostly gets sold to spot markets in South America.  This is a good deal for the US, because transit times are short, leading to better profits and shorter sailings for the LNG ships (and thus quicker turnaround to make another sale) Sales of US LNG to Europe have generally been commercially insignificant, and at low profit margins for the US, because the transit times and costs are too great to compete with pipeline gas from Russia.  

As a result, a large chunk of the US sourced LNG making its way to Europe now is actually being re-sold by asian buyers who already had the gas on contract, and are marking it up and re-selling it to Europe.  They have generally gotten enough supplies for themselves already, and are making a nice profit on Europe's distress.  

The whole situation is too temporary to be in the strategic interests of the United States to be concerned about.  The amount of money involved is too small also.  While Russia makes a large income on the export of natural gas, the US does not - it's more of a 'sideline' to the domestic market where 90% of the natural gas produced in the US goes.  In fact there are large and influential political interests in the US which are against exporting too much natural gas,  because they see a greater advantage in having cheap energy domestically.  Right now we have both - cheap domestic supply, and exports, but exports will be chopped off rather quickly if a decision has to be made politically.  

[dukeNukem + 80]

14 hours ago, Eric Gagen said:

I hate to break this to you, but long term the US has no significant interest in selling natural gas to Europe.  Ironically it's for the same basic reasons the Russians aren't selling to them either.  European buyers consistently want to buy 'spot' cargoes or sign short term contracts, and US LNG suppliers have a lot of gas for sale - they want long term contracts, and for those, they have mostly been selling to Asia.  US LNG that doesn't get sold on long term contracts to Asia mostly gets sold to spot markets in South America.  This is a good deal for the US, because transit times are short, leading to better profits and shorter sailings for the LNG ships (and thus quicker turnaround to make another sale) Sales of US LNG to Europe have generally been commercially insignificant, and at low profit margins for the US, because the transit times and costs are too great to compete with pipeline gas from Russia.  

As a result, a large chunk of the US sourced LNG making its way to Europe now is actually being re-sold by asian buyers who already had the gas on contract, and are marking it up and re-selling it to Europe.  They have generally gotten enough supplies for themselves already, and are making a nice profit on Europe's distress.  

The whole situation is too temporary to be in the strategic interests of the United States to be concerned about.  The amount of money involved is too small also.  While Russia makes a large income on the export of natural gas, the US does not - it's more of a 'sideline' to the domestic market where 90% of the natural gas produced in the US goes.  In fact there are large and influential political interests in the US which are against exporting too much natural gas,  because they see a greater advantage in having cheap energy domestically.  Right now we have both - cheap domestic supply, and exports, but exports will be chopped off rather quickly if a decision has to be made politically.  

You are spot on Eric. I would add - European buyers love free market and "spot" gas only when price is LOW. Obviously IEA also does not understand cause and effect on this matter... https://www.iea.org/commentaries/despite-short-term-pain-the-eu-s-liberalised-gas-markets-have-brought-long-term-financial-gains?utm_content=bufferfb408&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer

 

 

[Eric Gagen + 713]

2 hours ago, dukeNukem said:

You are spot on Eric. I would add - European buyers love free market and "spot" gas only when price is LOW. Obviously IEA also does not understand cause and effect on this matter... https://www.iea.org/commentaries/despite-short-term-pain-the-eu-s-liberalised-gas-markets-have-brought-long-term-financial-gains?utm_content=bufferfb408&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer

 

 

Long term contracts are free market constructs too.  what the IEA was railing against was oil indexed contracts which IIMHO are bizarre - there isn't much in the way of linkage between oil and gas in practical use, so they shouldn't be linked in price either. It's not really super beneficial for the buyers or the sellers in most cases.   Nothing was stopping European nations from signing longer term contracts for natural gas, but they chose not to do it.  

[Eyes Wide Open + 3,555]

4 hours ago, dukeNukem said:

You are spot on Eric. I would add - European buyers love free market and "spot" gas only when price is LOW. Obviously IEA also does not understand cause and effect on this matter... https://www.iea.org/commentaries/despite-short-term-pain-the-eu-s-liberalised-gas-markets-have-brought-long-term-financial-gains?utm_content=bufferfb408&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer

 

 

The EU blind rush into green energy perhaps a blunder equal to ww2. Only time will tell. Merkel was a blatant advocate of green, and new quite well of the dangers she was exposing Germany to.

Nord Stream 2: Russia must not use gas pipeline as weapon, says Merkel

https://www.bbc.com/news/world-europe-58301099

Edited January 31, 2022 by Eyes Wide Open

[Andrei Moutchkine + 828]

9 hours ago, Eric Gagen said:

Long term contracts are free market constructs too.  what the IEA was railing against was oil indexed contracts which IIMHO are bizarre - there isn't much in the way of linkage between oil and gas in practical use, so they shouldn't be linked in price either. It's not really super beneficial for the buyers or the sellers in most cases.   Nothing was stopping European nations from signing longer term contracts for natural gas, but they chose not to do it.  

The oil-linked long term contracts were a part of the "Groningen model" Back when, there was much closer resemblance of the way natgas was used compared to alternate liquid fuels. Until about this year, this resulted in natgas sold at a discount to liquids on joule/watt equivalence basis. Alas, not any longer.

[Andrei Moutchkine + 828]

9 hours ago, Eyes Wide Open said:

The EU blind rush into green energy perhaps a blunder equal to ww2. Only time will tell. Merkel was a blatant advocate of green, and new quite well of the dangers she was exposing Germany to.

Nord Stream 2: Russia must not use gas pipeline as weapon, says Merkel

https://www.bbc.com/news/world-europe-58301099

This translates to "Russia may not have the additional pipeline capacity", yet somehow "Russia must pump more gas for less" at the same time. Which is obviously cognitively dissonant.

Edited February 1, 2022 by Andrei Moutchkine

[Eyes Wide Open + 3,555]

53 minutes ago, Andrei Moutchkine said:

Somehow, this translates to "Russia may not have the additional pipeline capacity", yet somehow "Russia must pump more gas for less" at the same time. Which is obviously cognitively dissonant.

Look MERKEL opened the door or Putin to put in place massive LNG price hikes. 

And of course Putin drove a tank thru that door. Childish behavior on both parts.

[Andrei Moutchkine + 828]

1 hour ago, Eyes Wide Open said:

Look MERKEL opened the door or Putin to put in place massive LNG price hikes. 

And of course Putin drove a tank thru that door. Childish behavior on both parts.

I don't follow? Europe is free to buy however much LNG from wherever, with Russia being a relatively minor source of it yet. It is bound to be inherently more expensive than Russian pipeline CNG though. It was also Europe which insisted on volatile spot market pricing.

Edited February 1, 2022 by Andrei Moutchkine

[Eyes Wide Open + 3,555]

12 hours ago, Andrei Moutchkine said:

I don't follow? Europe is free to buy however much LNG from wherever, with Russia being a relatively minor source of it yet. It is bound to be inherently more expensive than Russian pipeline CNG though. It was also Europe which insisted on volatile spot market pricing.

Frankly nor do i...follow it. Putin has opened Pandora's box, how this ends will be with a consensus of nation's. 

Generally speaking humanity does not do well in such matters...teenage aggression generally winds up with someone/something getting hurt/broken and the adults pick up the broken pieces.

Edited February 1, 2022 by Eyes Wide Open

[Eric Gagen + 713]

15 hours ago, Andrei Moutchkine said:

This translates to "Russia may not have the additional pipeline capacity", yet somehow "Russia must pump more gas for less" at the same time. Which is obviously cognitively dissonant.

That was a very odd article - to me the key takeaway was not something with respect to any sort of potential conflict between Germany and Russia,or the EU and Russia, or any dispute over contract terms, or gas prices, or any geopolitical issues. these would be obvious topics.  Instead they went with "

"Ukraine fears that the Russian-led Nord Stream 2 gas pipeline will tighten Moscow's grip over the region's energy supply and strengthen its influence."

and

"Mr Zelensky said he was concerned about what would happen in three years when the contract to deliver Russian gas through Ukrainian pipelines runs out. The loss of billions of dollars in transit fees would hit Ukraine's economy hard.

Mrs Merkel, who held talks with Russian President Vladimir Putin on Friday, promised to provide more than a billion dollars to help expand Ukraine's renewable energy sector."

So from this point of view it's 'merely a commercial matter about cutting the poor Ukrainians out of their transit fees, which is a very very strange lens to look at the whole situation.  Basically - send Ukraine some cash so we can do our deal, which sounds very much like the semi-official German stance on the whole situation to the degree that they have a position. 

[ronwagn + 6,290]

15 hours ago, Eyes Wide Open said:

Look MERKEL opened the door or Putin to put in place massive LNG price hikes. 

And of course Putin drove a tank thru that door. Childish behavior on both parts.

Your map points out that the access to Latvia, Lithuania and Estonia by Europe is given by a small area between Russian Kaliningrad, and Belarus which is presently being armed by Russia and has an aggressive stance readying for Ukraine. Putin may be tempted to combine Ukraine and the above in one move or a second one later. They are NATO members so that would be more dangerous. 

We may bee seeing the Apocalypse soon. 

[Andrei Moutchkine + 828]

2 hours ago, Eric Gagen said:

That was a very odd article - to me the key takeaway was not something with respect to any sort of potential conflict between Germany and Russia,or the EU and Russia, or any dispute over contract terms, or gas prices, or any geopolitical issues. these would be obvious topics.  Instead they went with "

"Ukraine fears that the Russian-led Nord Stream 2 gas pipeline will tighten Moscow's grip over the region's energy supply and strengthen its influence."

and

"Mr Zelensky said he was concerned about what would happen in three years when the contract to deliver Russian gas through Ukrainian pipelines runs out. The loss of billions of dollars in transit fees would hit Ukraine's economy hard.

Mrs Merkel, who held talks with Russian President Vladimir Putin on Friday, promised to provide more than a billion dollars to help expand Ukraine's renewable energy sector."

So from this point of view it's 'merely a commercial matter about cutting the poor Ukrainians out of their transit fees, which is a very very strange lens to look at the whole situation.  Basically - send Ukraine some cash so we can do our deal, which sounds very much like the semi-official German stance on the whole situation to the degree that they have a position. 

This is because the pipeline is not even "Russian-led". Gazprom only provided something like 1/4 of the investment, the rest came from European gas majors, It only appears to be the sole proprietor now to protect against the previous round of Polish-cavalry-style litigation.

Before everybody got so positive on Ukraine in 2014, it made every business sense to cut them out already. Even if they weren't siphoning anything off the record (which I find hard to believe), is their system is old, byzantinely complex and hasn't seen any repairs in the last 30 years. The North Streams are just straight pipes with no intermediate taps, are shorter and driven by just one giant compressor station, so they are bound to have much lower operational expenses no matter what.

Ukrainian renewables is a corruption quagmire worse than EU's own. Because the subsidized tariffs being paid are even higher than those in the EU, but there are no obvious renewable assets left, so it all ends up in Mr. Akhmetov's pocket somehow (him being the largest Ukrainian oligarch, who does energy)

The only renewable scheme of some merit was due to a fellow named

https://en.wikipedia.org/wiki/Andriy_Klyuyev

who was a politician close to Yanukovych and a budding oligarch

https://munscanner.com/2020/02/stashing-away-how-klyuev-brothers-kept-the-solar-power-plants-in-crimea/

Removing the spin, this is pretty damn non-corrupt by Ukrainian standards. You see, it turns out that Crimea is some kind of insolation anomaly. The only place in Europe which gets more sun is South of Spain. It also happens to be the same latitude as the northernmost part of US-Canadian border. There are also arid wastelands there nobody really needs otherwise. Which ended up producing two of the largest European solar power plants as of 2014 (the article incorrectly claims the world record) The EU arrested their operational company and accounts, which were in Austria, and that was it. Don't think the solar plants are operational. The Kluevs are in exile in Russia, but don't seem to have Putin's ear. Because when Ukraine cut off Crimea off its grid, the Russians simply built two natgas fired plants instead (which came to some prominence due to Siemens turbines that were "smuggled" for them)

 

[Andrei Moutchkine + 828]

3 hours ago, ronwagn said:

Your map points out that the access to Latvia, Lithuania and Estonia by Europe is given by a small area between Russian Kaliningrad, and Belarus which is presently being armed by Russia and has an aggressive stance readying for Ukraine. Putin may be tempted to combine Ukraine and the above in one move or a second one later. They are NATO members so that would be more dangerous. 

We may bee seeing the Apocalypse soon. 

This be the infamous Suwalki Gap

https://www.globalsecurity.org/military/world/europe/suwalki-gap.htm

where Russia was having an aggressive stance towards something or other since 1991 already. So, don't get your hopes up.

Edited February 1, 2022 by Andrei Moutchkine

[Andrei Moutchkine + 828]

5 hours ago, Eyes Wide Open said:

Frankly nor do i...follow it. Putin has opened Pandora's box, how this ends will be with a consensus of nation's. 

Generally speaking humanity does not do well in such matters...teenage aggression generally winds up with someone/something getting hurt/broken and the adults pick up the broken pieces.

What is it exactly that Putin allegedly did? The consensus of the Russian nation is that he did nothing new.  It is the Western press which is spinning some kind of story of aggravated Russian aggression right now. There is absolutely zero saber-rattling in the Russian press, which would not be the case if they were prepping for war. Everybody is like, "We are not really doing anything unusual"

[ronwagn + 6,290]

19 minutes ago, Andrei Moutchkine said:

This be the infamous Suwalki Gap

https://www.globalsecurity.org/military/world/europe/suwalki-gap.htm

where Russia was already having an aggressive stance towards something or rather since 1991 already. So, don't get your hopes up.

Fulda Gap

https://military-history.fandom.com/wiki/Fulda_Gap

I was stationed not far from there in Bad Kreuznach. Our mission included transporting civilians out of the area in case of war. We were always told that we would have to use nuclear field weapons to stop the Russians if they attacked. The numbers were too overwhelming in East Germany. Many soldiers families were in Germany. The A10 tank killer aircraft was used many years later in Iraq. 

[Andrei Moutchkine + 828]

20 minutes ago, ronwagn said:

Fulda Gap

https://military-history.fandom.com/wiki/Fulda_Gap

I was stationed not far from there in Bad Kreuznach. Our mission included transporting civilians out of the area in case of war. We were always told that we would have to use nuclear field weapons to stop the Russians if they attacked. The numbers were too overwhelming in East Germany. Many soldiers families were in Germany. The A10 tank killer aircraft was used many years later in Iraq. 

See, there is always some kind of special Gap to defend against the allegedly invading Russian hordes. Business as usual

[Eyes Wide Open + 3,555]

46 minutes ago, Andrei Moutchkine said:

What is it exactly that Putin allegedly did? The consensus of the Russian nation is that he did nothing new.  It is the Western press which is spinning some kind of story of aggravated Russian aggression right now. There is absolutely zero saber-rattling in the Russian press, which would not be the case if they were prepping for war. Everybody is like, "We are not really doing anything unusual"

Old Chinees saying....

 

[Andrei Moutchkine + 828]

17 minutes ago, Eyes Wide Open said:

Old Chinees saying....

 

Not very informative.

I am genuinely trying to find whether there is any merit to current reports of allegedly aggravated Russian aggression, but haven't been able to find any. Appears to be 100% made up. Which is amazing, given that the regular level of reporting on this was completely made up already.

[Tomasz + 1,608]

Increase of "Gazprom" in the number of requests for pumping gas through the territory of Ukraine almost 1.7 times - the expected phenomenon, "blue fuel" will go to Europe and will be directed at current consumption, and not on adding underground gas storage (UGS).

Such an opinion was expressed in an interview with the Prime agency, the leading expert of the Foundation for National Energy Security (ФНЭБ) Igor Юшков.

He pointed out that the increase in pumping is able to reduce spot gas prices, but this will be a rather psychological reaction of the market. "The market will" digest "this news within 1-2 days, after which the prices will return to the previous levels" - said the expert.

According to Shkov, in January the weather in Europe was warm, and there they tried to collect the maximum amount of gas from the UGS to consume cheaper fuel. "But the underground storage facilities are exhausted, and the Europeans are already dealing with the limitations of the episode selection. This means that the less gas in the underground storage facilities, the less gas you can get from there, the pressure drops," he explained. "Therefore, Europe will inevitably increase imports. The less gas in the UGS - the more there will be heavy imports. So, as you can see, they also turn to Gazprom and increase the volume of supplies. "
The expert suggested that the Europeans would send 100% of the gas to the current consumption, because the selection of UGS fuel continues and there are in fact no temporary "windows" for its extraction.
"The heating season is in full swing, and everything that is missing from the UGS, compensated by imports. And the further, the closer to the end of the heating season, the more imported gas will control the gas that is taken from the warehouse" - he noted and added that in as they run out of storage, as the demand for gas grows, perhaps "Gazprom" will increase consumption by Poland.
"If there is a demand - and other gas pipelines will already burden, it will be natural," said Oshkov. "Europeans are very lucky with the weather. If the temperature was slightly lower, the UGS should be empty by the end of January".
According to experts, the increase in gas injection volume could positively affect spot gas prices. "Markets look at it positively, they will say - these are additional quantities, okay, there will be no deficit. The price may drop a bit, - he explained." But it will rather be a psychological reaction of the market. "this message and it will come back to previous results".
Gas prices in Europe, after the jump on January 24, continue to corrective decline, already falling below USD 900 per thousand cubic meters on the first day of February and losing 12% compared to yesterday's calculated price, data from the London ICE exchange show.
Gazprom's production in January increased by 1% compared to the same period last year, to 47.4 billion cubic meters of gas, the company reports.
 

Edited February 1, 2022 by Tomasz

[Tomasz + 1,608]

"From January 2022," Gazprom ", according to preliminary data, collected 47.4 billion cubic meters of gas. This is 0.5 billion cubic meters (1%) more than last year," reads the company's announcement on its channel in Telegram messenger.
Also in the discussed period, supplies from the transmission system to the domestic market increased by 3.2%, i.e. by 1.1 billion cubic meters, notes Gazprom. 3% to 11.4 billion cubic meters.
"From January 2022, exports to the CIS countries amounted to 11.4 billion cubic meters, which is 41.3% (8 billion cubic meters) less than in the same period of 2021.

In particular countries, deliveries increased in Bulgaria (by 20, 6%) and Bosnia and Herzegovina (12.9%) ", we read in a press release on the company's official Telegram channel.

[Tomasz + 1,608]

IEA sees no alternative to Russian gas for Europe
Russia may become the only source of additional gas supplies to Europe in 2022, according to the International Energy Agency (IEA) quarterly. Contrary to the risk of geopolitical tightening and some of the already existing trends for the increase in LNG imports, the IEA believes that Gazprom will increase supplies by about 2.5% compared to 2021, and LNG supplies to Europe have fallen by the same amount. Also, the agency is waiting for gas prices in Europe to fall to around $ 450 per thousand cubic meters in the third quarter.
"Gazprom" may become the only source of additional gas for Europe in 2022, according to the IEA report on the gas market for the fourth quarter of 2021. According to IEA forecasts, supplies of Russian gas to the European market may amount to 190-195 billion cubic meters.
IEA under the European market, in addition to the EU countries, means the non-European countries of the Balkans, as well as Turkey. This more or less coincides with how "Gazprom" in its statistics defines "other countries", although the Russian company includes China in them, supplies in which in the last two years, as the capacity of the "Strength of Siberia" gas pipeline has been expanded , became a clear reflection of the joint export dynamics.
In 2021, "Gazprom" put 185 billion cubic meters of gas to other countries, including 26.7 billion cubic meters in Turkey and around 13 billion cubic meters of gas to China. In this way, IŻ expects an increase in Russian gas supplies to the countries of Europe and Turkey in 2022 by about 10-13%, or about 18-20 billion cubic meters.
Considering that the demand for Russian gas on the Turkish market in 2021 practically returned to the service maximum, the main scope of additional gas, based on the logic of the IEA, may go to the EU market - in this case, supplies there will increase to 165-167 billion cubic meters . In 2021, according to "Kommersant", Gazprom's supplies in the EU country fell to 145 billion cubic meters (see "B" from 16 December 2021). If the IEA forecast proves true, in 2022, Gazprom's supplies in the EU will return to normal, although they will also subside in 2018-2019, when they accounted for over 175 billion cubic meters.
As for LNG deliveries to Europe, IŻ will expect a slight decrease (within 1.5%) in general in 2022 - to about 90 billion cubic meters, as it envisages saving the "Asian award" for LNG spot batches and the resulting cargo care, mainly in Asia. The agency forecasts a slowdown in the growth of global LNG trade from 6% in 2021 to 4% in 2022 (to approximately 392 million tonnes).
The assessment of the IEA is in sharp contrast to the trends that can be observed on the European market at the beginning of 2022.
As "Kommersant" wrote, in January, Europe imported a record-breaking amount of LNG, as "Gazprom", on the contrary, is getting ready to show the worst export rates in January at least in the last 15 years (see "B" from 31января). In January, Gazprom's average daily exports in the EU in January amounted to only 233 million cubic meters - that is half as much as December 2021 and half of what is necessary for the IEA forecast of the volume of Russian gas supplies for the year.
Moreover, the exacerbation of geopolitical tensions and growing concerns in Europe of possible interruptions in Russian gas supplies will apparently force European consumers to pay more for LNG. Gazprom, in turn, may be interested in quickly filling Europe's gas storage facilities based on the results of this heating season, as the low stockpile supports very high gas prices in Europe, around $ 1,000. for a thousand cubic meters.
The IEA in its report predicts that gas prices in Europe will remain historically high this year, but by the start of the third quarter they will fall by half of their current bookmark - to $ 12 per MBTU ($ 450 per thousand cubic meters) .
Of course, this assessment is based on the assumption that gas storage in Europe in the summer will be filled to the average level, from which in principle - not less than 15 billion cubic meters - now they are far behind.
"Europe - the world's largest balancing gas market and is able to absorb most of the shocks of the global gas market. But as an old car needs in the annual replacement of shock absorbers in the service, and Europe needs more supplies to fill its warehouses, to absorb new shocks," he writes in his article by Mike Shulvud from the Oxford Institute for Energy Research. Increasing supplies in practice requires an increase in gas flow from Russia from the Yamal-Europe or "North Stream-2" pipeline after its approval by the regulator.

[Tomasz + 1,608]

Gas reserves in Europe nosedived to historically low levels this month. According to data by Gas Infrastructure Europe, consumption from storage facilities this January is one third more than the average for the previous five years.

Experts have been raising concerns about the risk of full supply disruption to the EU if tensions between Moscow and Kiev escalate. The European Union receives roughly 40% of its gas via Russian pipelines, several of which run through Ukraine.

Statistics showed that storage facilities were 39.65% full of gas as of January 27. This is the first time that inventories dropped below the 40% mark. The level is 15.6 percentage points below the five-year average.

Typically, Europe’s gas inventories don’t fall even to half until about early-to-mid February. During some mild winters, the inventories don’t sink below midpoint until early March.

This month, the weather was very mild in Europe, but stockholders decided to use reserves to protect against high prices. In many contracts with suppliers, an exchange index “for a month ahead” is used, and now the price of its execution is at an all-time high. On average, gas was traded at $1,310 per thousand cubic meters last month at the TTF hub, with a maximum value of up to $2,138. Under such conditions, buying gas on the spot market at $976 per thousand cubic meters on average looks like a good solution, experts say.

The defensive behavior of importers has also seriously reduced the physical import of gas to Europe. In the first half of January, Gazprom's exports to non-CIS countries fell by 40%. However, analysts note that export volumes may change as early as February as prices stabilize.

According to the experts, the arrival of liquefied natural gas (LNG) cargos in Europe has alleviated the energy crunch. Last week, Europe’s gas transportation system received approximately 434 million cubic meters, a record for that date.

The world’s second-biggest producer of liquified natural gas (LNG), Qatar, has reportedly requested that the European Union restrict the reselling of its gas outside the bloc, if it is to provide emergency shipments in the event of a disruption of deliveries from Russia.

“Qatar’s supply wouldn’t be conditional on requests. But the issues need to be dealt with to ensure long-term and short-term solutions for Europe’s LNG crisis,” unnamed sources briefed on the talks said, as quoted by Reuters.

The news comes amid the continued speculation fueled by the US that Russia is preparing to invade Ukraine. In the event of a military conflict, Moscow has been threatened with severe economic sanctions that may target the country’s energy exports.

Russian gas supplies account for nearly 40% of Europe’s consumption. Any interruption will inevitably exacerbate the existing energy crunch amid the rapid recovery of major economies after the pandemic-related slowdown.Although Qatari producers lack enough spare gas, Doha has pledged to divert some volume from its Asian consumers with mediation from Washington. However, sources told Reuters that no such request has so far been made.

Qatar also wants the EU to conclude a 2018 investigation into the country’s long-term contracts, which the European Commission had said might be inhibiting the free flow of gas in Europe and its single gas market.

“That will ensure the EU can enter into long-term contracts with Qatar and others, instead of more costly spot contracts or searching for short-term solutions during a crisis,” the source said, as quoted by the agency.

Doha is also asking for guarantees that EU member states will divert any surplus LNG only within the bloc.

“If not implemented, emergency shipments to the EU could be resold as spot shipments for a profit out of the EU, basically prolonging the energy shortage in the EU,” the source said.

The amount of liquefied natural gas (LNG) running from entry terminals to the European gas transmission system has reportedly set a new monthly record in January, hitting the highest for this month since records began in 2011.

Some 405 million cubic meters of gas were delivered to Europe as of January 28, marking an enormous increase of 110% compared to the annual average for this date over the past five years, according to data from the Gas Infrastructure Europe trade group, as quoted by TASS.

The capacities of re-gasification of LNG and further injections of the fuel into pipelines in Europe are currently loaded at 67.4% of the maximum, the group’s data shows.LNG stocks in European gas storage tanks are 5% above the five-year average, which is thought to be quite high for the end of January.

Earlier this week, the WSJ reported that more than two-dozen tankers loaded with LNG were en route from the US to Europe, lured by high prices in the region, with another 33 ships also likely to head to the EU.

The European energy crunch, which has sent gas and power prices soaring, was exacerbated when storage tanks in the EU dropped to their lowest seasonal levels in more than ten years. The decline was attributed to longer-than-usual maintenance at Norwegian fields and to Russia restocking its own inventories.

On January 27, the loading levels of gas reserves in underground storage facilities in Europe dropped to 39.22%, which is 15.6% less than the annual average for this date over the past five years. The storage tanks currently contain 42.34 billion cubic meters, 15.7 billion cubic meters less than in 2021.

[Tomasz + 1,608]

So whtas going on - short comments as today 1 Febuary

Today begins a new month, and as far as anyone can understand, and I would stress that this understanding is incomplete today we have a new reset of the base price for Gazprom contract sales from M-1=December to M-1=January.

The drop is Gazprom volumes on 1 January appears to have been caused by very high average hub prices for December, causing their counterparties to minimize liftings.

Normally this would have driven prices back up, but the flood of LNG prevented this.

If analysts are correct about this dynamic, we should see now higher Russian pipeline flows on 1 February or at least 2 February.

If flows do not bump up toward December levels this week, something else is going on.

So we see this - today export though Ukraine up from 54 milion cubic meters per day to 108 

 

 

[Tomasz + 1,608]

Nice suprise was total NG export to China- it was planned at 10 bilion in 2021.

It was 13 bilion actually

But take under consideration after 8 months of 2021 it was only 7,1 bilion

Last 4 months of 2021 - 6 bilions actually so it means 48 milion cubic meters per day

48 milion x 351 days means 16,5 bilion per years actually in 4 q 2021.

[dukeNukem + 80]

13 hours ago, Eric Gagen said:

So from this point of view it's 'merely a commercial matter about cutting the poor Ukrainians out of their transit fees, which is a very very strange lens to look at the whole situation.  Basically - send Ukraine some cash so we can do our deal, which sounds very much like the semi-official German stance on the whole situation to the degree that they have a position. 

it is not only commercial matter, it is also about physical flow of gas. Ukrainian pipe is a part of old Soviet system and technically gas flow only from East to West direction. Ukraine do not buy gas directly from Russia and call it "virtual reverse". "Virtual" means there is no physical reverse, gas still came from Russia. But money goes to Slovakia, Hungary.