Gazprom refused to increase gas transit through Ukraine in October

Gazprom refused to book additional natural gas transit capacity through Ukraine for next month at an auction held on September 20. This is evidenced by the data of Regional Booking Platform (RBP).


According to the platform, at Monday's auction, Ukraine's GTS Operator offered transit capacity for October in the amount of up to 9.8 million cubic meters per day through the Suja gas metering station and up to 5.2 million cubic meters per day through the Sohranivka station. However, at the end of trading at 13:00 Moscow time, the additional capacities remained unclaimed.


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It is well known that the Russian gas holding has a long-term capacity reservation for 2021 in the amount of 40 billion cubic meters of Ukraine, which is 109 million cubic meters per day. In June, Gazprom pumped an average of 124 million cubic meters per day through Ukraine, fully selecting the reserved volume.


If the auction for firm capacity passes with a 100% sale, bidding for interruptible capacity may be arranged.


Earlier on Monday, gas prices in Europe exceeded $850 per thousand cubic meters. After the auctions for transit capacity in October, gas prices jumped to nearly $900.


Since the spring of 2021 the gas prices in Europe jumped four times. The blue fuel has been getting very expensive since the middle of August - after Gazprom sharply reduced its supplies to the EU via the Yamal-Europe pipeline.


On July 27, it was reported that Gazprom refused to book additional capacity through Ukraine for August. Similarly, the holding company declined to reserve for July, despite upcoming repairs on export pipelines. "The operator of Ukraine's gas transmission system auctioned additional transit capacity of 63.7 million cubic meters per day at the Russian-Ukrainian border crossing in Sudzha on the RBP auction platform. The announcement that the uninterrupted capacity had not been booked caused prices to rise.


"Gazprom did not reserve interruptible capacity at auctions in May as well.


On July 24, Naftogaz of Ukraine head Yuriy Vitrenko said he was unhappy with the market prices for Russian gas offered by Gazprom. He also pointed out that the company's proposals that it was ready to provide and increase gas transit through Ukraine with additional purchases of Russian gas confirm Moscow's desire for Kiev to negotiate fuel transit directly.


Meanwhile, "Gazprom" reported that they did not offer Ukraine to buy Russian gas and the words of the head of the company Alexei Miller that the issues of new volumes of gas purchases from Russia for transit through Ukraine after the end of the contract for gas pumping in 2024 should be decided on market conditions and at market prices, were addressed to the partners from the European Union.


Moscow and Kiev signed a package of agreements in late December 2019 to continue gas transit through Ukraine, including a five-year transit contract under which Gazprom guarantees to pump 65 billion cubic meters of gas in the first year and 40 billion cubic meters each in the next four years. The agreements ensured the continuation of transit after the expiration of the previous contract.


The decrease in gas supplies due to the scheduled repair work on the Yamal-Europe and Nord Stream gas pipelines in July may additionally affect the European market, where there is an increased demand and stagnating gas pumping into underground storage facilities, Prime news agency reported.


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