Natural Gas Prices in Europe Surge to Record Highs

BUSINESS TURKMENISTAN
Natural Gas Prices in Europe Surge to Record Highs
Europe is experiencing an acute shortage of gas amid a temporary decrease in Russian gas supplies.

Spot gas prices in Europe on Monday for the first time in history exceeded the $600 per 1,000 cubic meter mark. September futures on the Dutch TTF hub, according to the ICE Futures exchange, rose to $600.6, the Russia-based Vedomosti outlet reports.

Experts associate the current situation in the European gas market with the reorientation of suppliers of liquefied natural gas (LNG) to the Asian market, with the unclear fate of pumping additional volumes of gas through Ukraine, as well as with record low volumes of injection into underground gas storage (UGS) facilities in Europe.

According to Gas Infrastructure Europe association, as of Monday, European UGS facilities were only 66.3% full. This is an unusually low figure ahead of the fall/winter season compared to the same period last year, when storage was 91.4% full.

Europe is experiencing an acute shortage of gas amid a temporary decrease in Russian gas supplies via the Yamal-Europe gas pipeline after the accident at the Gazprom plant in Novy Urengoy on August 5. On August 6-17, natural gas flow via the pipeline reduced from 2.1 billion cubic meters to 1.4-1.5 billion cubic meters per day.

To fulfill its obligations under long-term contracts, the company had to withdraw gas from its own UGS facilities in Europe, as a result of which, as of August 23, reserves at the four largest storage facilities of Gazprom dropped to 12.8%.