Europe is in danger of running out of gas reserves at the peak of winter demand if supplies from Russia through the critical Nord Stream pipeline are completely cut off, according to Wood Mackenzie.
According to Bloomberg, in the worst case, in which the Nord Stream pipeline ending in Germany is completely closed, Europe will not be able to reach the storage levels required by the European Union until the start of the heating season in November.
And the Old Continent could run out of stock by January, Massimo Di Odoardo, WoodMac’s vice president of gas research and LNG, said in an email to the agency.
As he characteristically stated, “even with the taking of countermeasures, it may become inevitable that some distribution with a ticket will be needed”.
It is recalled that in a move that upset energy markets and brought new prices, the Russian giant Gazprom PJSC has reduced gas supplies to its customers in Italy, Germany, France and Austria for the last two days.
Gas prices jumped by daily jumps of 20%, reaching from 80 euros to 150 euros.
The Russian exporter said it had to reduce the capacity of the Nord Stream via the Baltic Sea due to maintenance problems with the turbines produced by Siemens. Germany, however, disputed the Russian allegations, saying the cuts were “politically motivated” and aimed at disrupting markets.
If reduced flows from Russia are maintained for longer, they may derail the summer effort to replenish stocks just as they were recovering, boosting optimism that the EU target of a minimum filling rate of 80% by November 1 can be met. .
According to WoodMac’s Di Odoardo, a complete shutdown of Nord Stream would mean that Europe’s storage levels would reach just 59% on 1 November.
If the pipeline continues to operate at only 40% of its capacity, then storage levels could reach 67% over the same period, with the risk of depletion by the end of winter, he added.
On the other hand, if the pipeline returns to full operation, then it is possible that the storage facilities will be up to 80% full on November 1, even if the prolonged shutdown of Freeport LNG, one of the most important liquefied gas nodes in USA.
According to energy analyst Patricio Alvarez of Bloomberg Intelligence, LNG imports are a key point in making up for declining flows from Russia.
However, he points out, “Nevertheless, the huge volatility of gas prices due to reduced supply from Russia and a decline in global LNG supply is likely to lead to greater use of stocks, which would intensify dependence on summer weather “.
It is noted that the prices of European gas today in Amsterdam are moving for the time being with small fluctuations (-1%) with the price of the July delivery contract at the extremely high level of 123 euros per megawatt hour.
On a weekly basis, after all, prices are increased by about 50%.
Source: Capital
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