Dutch Gas Prices Up as Nord Stream Turbine 'Gets Stuck in Transit'

Friday, July 22, 2022

Dutch gas prices rose on Friday, boosted by further delays in replacing a turbine for the Nord Stream 1 pipeline from Russia, and as Germany raised its gas storage targets, British gas prices fell, however, on softer demand, Reuters reported.

The benchmark Dutch front-month gas contract rose by 10.75 euros to 163.25 euros per megawatt-hour (MWh), breaching October's intraday high, while the contract for the next day delivery was up 10.50 euros to 161 euros/MWh by 0903 GMT.

"The stuck in transit turbine and the fact that they (Germany) raised storage targets means spot will be even more in demand," a European gas trader said.

A turbine that Moscow says has caused the Nord Stream 1 pipeline to pump less gas to Europe is stuck in transit in Germany because Russia has so far not given the go-ahead to transport it back, two people familiar with the matter told Reuters. 

The turbine, which usually operates at the Russian Portovaya compressor station, had been undergoing maintenance in Canada but was flown back to Cologne, Germany, on July 17 by logistics firm Challenge Group. It is unclear when the turbine can be returned, the people said, adding it could be days or even weeks.

Flows on the Nord Stream 1 pipeline resumed on Thursday following a 10-day maintenance period, but are still at 40% of capacity. Concerns linger that Russia could halt supplies entirely in response to Western sanctions over its war with Ukraine.

Meanwhile, Germany unveiled new energy-saving measures and raised its gas storage targets on Thursday, fearing that persistently low Russian gas supplies could lead to winter shortages.  

Germany will now aim to have its gas storage facilities 85% full by Oct. 1 and 95% full by Nov. 1, up from earlier targets of 80% and 90%, respectively, the economy ministry said in a statement.

"These news are pushing up prices, as while people sweep up spot they end up raising the curve, too," the trader said.

On the other hand, British gas prices fell on Friday on softer demand as temperatures eased following a heat wave and on a forecast rise in wind power generation.

The British within-day contract TRGBNBPWKD fell by 20 pence to 275 pence per therm while the day-ahead contract went down by 0.25 pence to 285 pence per therm by 0903 GMT.

Britain’s gas system was undersupplied by around 14 million cubic meters (mcm), National Grid data showed.

Peak wind power generation in the United Kingdom is forecast at 1.8 gigawatts (GW) on Friday, rising to 11.6 GW on Saturday, out of a total metered capacity of 19.9 GW, Elexon data showed.

In the European carbon market, the benchmark contract CFI2Zc1 rose by 0.37 euros to 78.50 euros a tonne.

Gas storage levels Europe https://tmsnrt.rs/3zgfUhB

Categories: Energy Pipelines Activity Europe

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