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With Europe facing a 25% cut in pipeline gas from Russia in July, Gazprom yesterday refused Ukraine’s offer to ship 50% more Russian gas to the EU in July.
Two Russian pipelines – Nord Stream 1 and Yamal-Europe – are to undergo maintenance in July, reducing flows from Russia by 2.2 billion cubic meters. With these scheduled shutdowns in mind, Ukraine’s Gas Transmission System Operator offered to increase daily transit by 51%, to 188 million cubic meters.
News that Gazprom spurned Ukraine’s offer pushed Europe gas prices yesterday over $400/1,000 cubic meters, the highest level in over a decade.
Facing high prices, Ukraine is delaying filling its storage reservoirs for this winter. Ukraine has 16 billion cubic meters in storage, 18% below the level of this time last year,
Naftogaz reports.
Interfax-Ukraine has warned: “The injection of gas into underground storage facilities is at a minimum, which leaves no doubt that Europe will meet the new winter with half-empty underground storage facilities.”
July will be the third month that Gazprom holds back on shipping more gas volumes through Ukraine.
Analysts have concluded that Gazprom is working to raise European gas prices and to build support for the Nord Stream 2 pipeline. A sizeable number of US congressional representatives seek to impose sanctions to prevent this Russia-Germany gas line from opening in the fall.