Why Natural Gas will go up!
European utilities have delayed filling up their storage tanks, hoping to profit from lower gas prices in the summer quarter for winter heating season, which runs from October 15 - April 15 , the filling of storage tanks is vital during the summer months if utilities are to cope with peak demand in January and February. Russia is Europe's biggest gas supplier, contributing 43% of the 27-country European Union's gas imports last year. The largest importers are Germany, Italy, Austria, Turkey, and France. Natural gas supplies via Gazprom Export to the countries of Western Europe and Turkey. Russian gas flows through Ukrain affect 18 European countries that being said the average European country has storage capacity sufficient to meet around about 20 days of peak demand. According to the European Aggregated Gas Storage Inventory (AGSI) most of the european union member states are not filled to full capacity.
There are many factors why the price of Natural Gas dipped in the recent days, the main reason is most likely due to the operator of the Russia-led Nord Stream 2 gas pipeline in the Baltic Sea said the first of the project's two lines has been filled with what is known as technical gas, Technical gas consisted of several components, the largest of which is fuel gas which is used for fueling compressors at gas pumping stations and the reason for this technical gas
is to maintain pressure the system at all times because the gas pipeline system requires a certain baseline pressure throughout. If pressure decreased to a critical level, compressors at gas pumping stations either could consumed all the gas to continue the compressor's own operations or break down. This would not only mean no gas supply for Germany, but also no gas exports moving through the Nord Stream 2 system to the rest of Europe and with that being said it is still awaiting clearance to start sales to Europe which is expected by November 2021.
Now regarding ND2 the US Department of State is committed to fully implementing sanctions authorities in the Protecting Europe’s Energy Security Act of 2019 (PEESA)
One important thing to note is Gazprom is Russia's biggest export earner and taxpayer but its business is dependant on Ukraine as 80% of Gazprom's exports to Europe cross Ukraine. The extensive pipeline system, gas compressor stations, and gas storage facility are important strategic assets for Ukraine that, if managed properly, can be a lucrative source of public sector but it is also used as a political tool especially the Bogorodchany Underground storage is the 2nd largest gas storage facility in Ukraine, but the only one near the western border of Ukraine that can be tapped into very quickly, allowing the retrieval of more than 50 million cubic meters (mcm) of gas per day. Ukraine has one larger facility in Lviv oblast, but due to its geological characteristics drains more slowly than Bogorodchany. Now in gas crisis, everyone would be turning to Bogorodchany to provide enough gas to weather a
shortage, be it from natural or political causes. The UGS is connected to all 3 transit pipelines and lifted gas can be quickly pumped into the pipelines to increase gas supply to Europe during peak demand periods in the winter.
The problem is if Russia stopped supplies to Ukraine, the Ukrainian system could keep transit gas flowing for about 2 days. it can continue operations even at lower pressure and keep servicing transit volumes because of the pipeline system's interconnected pipelines that cross one another at multiple points. When Russia shuts off supplies to certain pipelines Ukraine can open connections between crossing pipelines, and this allowes Ukraine to equalize the pressure in pipelines throughout the system, which alleviated the pressure fall in the Russian-targeted pipelines and keeps pressure in these pipelines from reaching a critical level. However, several pumping stations located along pipelines near the affected Russian input points has to be stopped to prevent breaking equipment in a methodical manner. BUT Ukraine has to compensated for gas it has to withdraw from the system for its own consumption by adding gas from storage facilities near its western borders to export lines.
As one can notice Ukrainian gas storage capacity is only 44.95% full, that means Ukraine is not ready for winter and if Ukraine is not ready for winter it means most of the European Union is not ready for winter.
European utilities have delayed filling up their storage tanks, hoping to profit from lower gas prices in the summer quarter for winter heating season, which runs from October 15 - April 15 , the filling of storage tanks is vital during the summer months if utilities are to cope with peak demand in January and February. Russia is Europe's biggest gas supplier, contributing 43% of the 27-country European Union's gas imports last year. The largest importers are Germany, Italy, Austria, Turkey, and France. Natural gas supplies via Gazprom Export to the countries of Western Europe and Turkey. Russian gas flows through Ukrain affect 18 European countries that being said the average European country has storage capacity sufficient to meet around about 20 days of peak demand. According to the European Aggregated Gas Storage Inventory (AGSI) most of the european union member states are not filled to full capacity.
There are many factors why the price of Natural Gas dipped in the recent days, the main reason is most likely due to the operator of the Russia-led Nord Stream 2 gas pipeline in the Baltic Sea said the first of the project's two lines has been filled with what is known as technical gas, Technical gas consisted of several components, the largest of which is fuel gas which is used for fueling compressors at gas pumping stations and the reason for this technical gas
is to maintain pressure the system at all times because the gas pipeline system requires a certain baseline pressure throughout. If pressure decreased to a critical level, compressors at gas pumping stations either could consumed all the gas to continue the compressor's own operations or break down. This would not only mean no gas supply for Germany, but also no gas exports moving through the Nord Stream 2 system to the rest of Europe and with that being said it is still awaiting clearance to start sales to Europe which is expected by November 2021.
Now regarding ND2 the US Department of State is committed to fully implementing sanctions authorities in the Protecting Europe’s Energy Security Act of 2019 (PEESA)
One important thing to note is Gazprom is Russia's biggest export earner and taxpayer but its business is dependant on Ukraine as 80% of Gazprom's exports to Europe cross Ukraine. The extensive pipeline system, gas compressor stations, and gas storage facility are important strategic assets for Ukraine that, if managed properly, can be a lucrative source of public sector but it is also used as a political tool especially the Bogorodchany Underground storage is the 2nd largest gas storage facility in Ukraine, but the only one near the western border of Ukraine that can be tapped into very quickly, allowing the retrieval of more than 50 million cubic meters (mcm) of gas per day. Ukraine has one larger facility in Lviv oblast, but due to its geological characteristics drains more slowly than Bogorodchany. Now in gas crisis, everyone would be turning to Bogorodchany to provide enough gas to weather a
shortage, be it from natural or political causes. The UGS is connected to all 3 transit pipelines and lifted gas can be quickly pumped into the pipelines to increase gas supply to Europe during peak demand periods in the winter.
The problem is if Russia stopped supplies to Ukraine, the Ukrainian system could keep transit gas flowing for about 2 days. it can continue operations even at lower pressure and keep servicing transit volumes because of the pipeline system's interconnected pipelines that cross one another at multiple points. When Russia shuts off supplies to certain pipelines Ukraine can open connections between crossing pipelines, and this allowes Ukraine to equalize the pressure in pipelines throughout the system, which alleviated the pressure fall in the Russian-targeted pipelines and keeps pressure in these pipelines from reaching a critical level. However, several pumping stations located along pipelines near the affected Russian input points has to be stopped to prevent breaking equipment in a methodical manner. BUT Ukraine has to compensated for gas it has to withdraw from the system for its own consumption by adding gas from storage facilities near its western borders to export lines.
As one can notice Ukrainian gas storage capacity is only 44.95% full, that means Ukraine is not ready for winter and if Ukraine is not ready for winter it means most of the European Union is not ready for winter.