Russia pumps more gas to Europe via Ukraine than ever
Gas supply from Russia to Europe via Ukraine rose on Wednesday morning for the first time in weeks, as price spreads turned more favourable to incentivise flows.
Russia's Gazprom said it will ship 29.4 million cubic metres (mcm) of gas to Europe through Ukraine via the Sudzha entry point, up from Tuesday's level of 24.5 mcm, informs Reuters
Just 30% pre-conflict-lower
However, flows are still around 27% lower than levels at the start of the winter gas season last year.
The transit line through Ukraine remains the only remaining route for Russian gas flows to central and western Europe after the Nord Stream 1 pipeline was halted late last August.
In January, Russian deliveries slumped via this route from the previous month. Analysts attributed this to importers taking less gas under remaining long-term Russian gas contracts as milder temperatures and healthy stocks in Europe caused prices to fall to pre-Ukraine war levels.
"In January, Gazprom’s European exports fell to levels not seen since the days of the USSR. This is not due to Gazprom withholding gas, however, but rather due to buyers opting for cheaper spot gas over Gazprom’s contracted prices," said analysts at investment banking and brokerage firm BCS.
Gazprom's month-ahead contract prices rose in January, well above spot prices. Therefore, buyers moved away from month-ahead contracts and export volumes dropped from early January.
BCS has retained its estimate of 2023 Gazprom's exports to Europe at 65 billion cubic metres as volumes should rise once contract prices catch up with the spot market.
Dutch gas prices closed higher on Tuesday due to outages in Norway and expectations of colder weather for the next week.
Meanwhile, nominations, or requests, for Russian gas into Slovakia from Ukraine via the Velke Kapusany border point rose to 23.7 mcm, up from 18.6 mcm the previous day, Ukrainian transmission system data showed.
Eastbound gas flows on the Yamal-Europe pipeline to Poland from Germany and flows of Russian gas via Ukraine remained stable on Wednesday morning, pipeline operator data showed.
Exit flows at the Mallnow metering point on the German-Polish border stood at 851,216 kilowatt hours per hour (kWh/h) between 1200 CET and 1300 CET, little changed from the previous day.