MOSCOW – Gazprom has refused to book additional transit capacity through Ukraine and has bought only a third of the proposed transit capacity of the Yamal-Europe pipeline, according to results of October booking auctions.
The results of booking auctions for gas transport capacities of the Polish and Ukrainian transit corridors in the deficit year of 2021 have a strong influence on the gas price on the spot market and Gazprom’s share price.
“The liberalization of the European gas market has led to the abandonment of long-term transit contracts. They were replaced by transparent auction-based booking to exclude extra costs for booking excess capacities from the gas price. As a result, forwarders are free to reserve only the amount of capacity they need and for the time they need it,” the report says.
UKRAINE
GTS Operator of Ukraine (GTSOU) has distributed the offered capacities on two routes (previously only one route was put up for auction). The Sudzha gas metering station (GMS) offered 9.8 million cubic meters per day, and another 5.2 million cubic meters per day was offered at the Sohranivka GMS. All of this capacity remained unclaimed.
Gazprom has a long-term reservation of Ukrainian capacities for 2021 in the amount of 40 billion cubic meters, which is 109 million cubic meters per day.
In the previous months of this year, Gazprom regularly booked additional solid transit capacity through Ukraine (up to 15 million cubic meters per day), and never booked the additional interruptible capacity offered by GTSOU (up to 63.7 million cubic meters per day were offered).
As of September, the GTSOU put up additional capacity of 15 million cubic meters per day at the Sudzha GMS, of which only 650,000 cubic meters per day were booked.
POLAND
Gazprom also booked 31.4 million cubic meters per day (89 million cubic meters were offered) of capacity of the Polish section of the Yamal-Europe pipeline in October, according to the results of the booking session at GSA Platform.
The Yamal-Europe pipeline stretching over 2,000 kilometers can pump up to 33 billion cubic meters a year. The Polish 683-kilometer section is owned by the joint venture EuRoPol Gaz and operated by the national gas transmission operator Gaz-System. Gazprom’s long-term contract for transit through Poland ended a year ago. Since then, its capacity has been allocated on the basis of booking auctions. For the gas year from October 2020 to September 2021, Gazprom has booked capacity at an annual auction. Gazprom has not yet made further reservations for the year and for the quarter ahead at auctions that have already taken place, noting that short-term reservation instruments remain available.
