Moscow again rejected additional gas-pipeline space offered by Ukraine, keeping European buyers guessing as future flows on the key Nord Stream route also remain uncertain.
At a monthly auction on Monday, Russia’s Gazprom PJSC opted not to book extra capacity to ship gas to Europe via Ukrainian pipelines in August. That keeps deliveries to the continent tight, just as concern grows that the Nord Stream link may not fully return when maintenance ends later this week.
Russia’s squeeze on gas supplies has unsettled the market, with European benchmark futures more than doubling in value this year. Last week, Germany started to withdraw gas from stockpiles that it had been building up for winter, while Hungary declared an “energy state of emergency.”
Ukraine has on numerous occasions called for Gazprom to increase flows via the Sudzha cross-border point to add supply to Europe – an option Russia has rejected for weeks. A second border point, Sokhranovka, was put out of service in May amid fighting in eastern Ukraine.
Making matters worse, another key back-up route – the Yamal-Europe pipeline running through Belarus and Poland – is no longer an option after Moscow sanctioned the owner of the Polish section of the link in May.
To be sure, Gazprom can still book extra space on Ukrainian pipelines at daily auctions, though such a move is unusual.
The Russian company can supply 77.2 million cubic meters of gas a day via Sudzha under its transit contract with Ukraine, but has kept flows at about 42 million for weeks. If it had sent contracted flows in full, and added the 15 million cubic meters on offer in Monday’s auction, the total volume would have equated to about 30% of peak Nord Stream capacity.
Moscow slashed flows through the Nord Stream pipeline by more than half in June, citing delays to gas-turbine maintenance because of Canadian sanctions. One turbine stranded in Montreal was flown to Germany on Sunday and is expected to arrive in Russia in about a week, Kommersant newspaper reported. Yet some buyers in Europe have voiced concern that the pipeline – halted for separate annual maintenance last week – may not fully return once the works end on July 21.
Several annual capacity auctions were also held on Monday, with no bookings made.