MOSCOW/OSLO: Russia increased its flow of gas to Europe via Poland and Belarus as well as Ukraine on Wednesday, easing some of Europe's concerns about tight supplies before winter and pushing down wholesale prices.
Low flows to Europe last week and reverse flows on the Yamal-Europe pipeline — meaning gas flowed eastwards into Poland instead westbound into Germany — had worsened a supply squeeze in Europe that has driven up energy prices for industry and consumers.
But after an order by President Vladimir Putin to increase supplies to Europe and rebuild Russian inventories there once domestic storage tanks were replenished, Moscow started pumping gas to Germany again late on Monday.
On Tuesday, Russian state gas company Gazprom said it had started to refill its European gas storage. This pushed down spot prices in the region although analysts said Moscow would have to do more to ease concerns in Europe to lead to a more significant drop in prices. read more Entry flows into Germany via the Yamal-Europe pipeline, which runs through Belarus and Poland, rose to 12,469,613 kilowatt hours (kWh) per hour at the Mallnow metering point on the Polish border, up from 9,825,008 kWh/hour most of the previous day, data on German transmission company Gascade's website showed. read more While Mallnow flows were at their highest volume in weeks, they remain "well below" levels seen in September, analysts at Refinitiv said in a note.
"The flows are unlikely to keep growing as only 325 GWh/d of Mallnow's entry capacity was booked for November," they added.
Meanwhile, nominations for flows at Velke Kapusany on the Slovak-Ukraine border, stood at 94.3 million cubic metres (mcm) per day, the highest daily nomination this year.
That was up from 85.2 mcm/day on Tuesday, website data from Eustream, the Slovak transmission system operator, showed.
In a sign of concerns in Europe easing, the Dutch front-month gas contract — a European benchmark — was down 8% at 64.35 euros per megawatt hour (MWh) by 1126 GMT on Wednesday, its lowest level since Nov 2.
Gas prices have risen this year because of factors including low gas inventories and increased demand following the economic recovery since the easing of COVID-19 lockdowns, as well as tighter-than-usual supplies from Russia.
In Britain, some energy companies have gone bust, consumers face much higher energy bills and companies in many sectors including food production and agriculture have felt the pain.
Internet data displayed by Gazprom-owned German storage company Astora, which operates two storage facilities in Germany and one in Austria, showed the Rehden storage facility in Germany had been steadily receiving 406,875 kWh per hour of gas from early Tuesday.
At Germany's Jemgum storage facility, and Austria's Haidach, there were no receipts on Wednesday morning but volumes were being withdrawn at rates of 1,115,086 kWh/h and 3,772,347 kWh/ respectively.
Overall European gas storage levels stood at 75.6% of capacity on Monday compared with 93.9% a year earlier, data from infrastructure group GIE showed.
German levels, which account for a quarter of European Union storage capacity, stood at 69.9% compared with 93.3% a year ago.
It now seems Russia will be able to export more gas to Europe, given that the replenishing of its domestic storage is reported to be complete, consultants Eurasia Group said.
"That would provide Europe’s energy markets with significant relief, although there may still be shortages this winter should it stay cold for several weeks and/or Russia’s supply increases are not significant," it said in a note.
Moscow would ideally have liked to export its additional gas via the newly completed Nord Stream 2 pipeline that goes under the Baltic Sea into Germany, avoiding costly transit through Ukraine, it said.
Nord Stream 2 is still awaiting regulatory approval from Germany and the EU, which is likely to take until early 2022.
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