Russian pipeline gas flows to Europe drop back in May

Russia's pipeline gas flows to Europe in May dropped back month on month to 1.76 Bcm as deliveries via the TurkStream pipeline slowed, an analysis of data from S&P Global Commodity Insights showed June 5.

Russian deliveries into Europe by pipeline are currently limited to flows via Ukraine entering at the Sudzha point on the Russia-Ukraine border and via the European string of TurkStream.

Excluding supplies to the former Soviet state of Moldova, total Russian pipeline exports to Europe in May via the two remaining major supply routes were down by 11% compared with April and 78% down year on year.

The reliability of the remaining Russian gas exports to Europe also remains a concern, with the EU cautioning at the end of March that the total cessation of Russian flows to Europe in 2023 was still a possibility.

In addition, Russia's five-year transit deal with Ukraine signed at the end of 2019 expires in December 2024.

Russia gradually choked gas supply to Europe through 2022, ending deliveries via the Yamal-Europe and Nord Stream pipelines, and sharply cutting exports via Ukraine.

The two-string Nord Stream pipeline was subsequently hit by a suspected sabotage attack in late September, rendering the system unusable.

TurkStream drop

Russian gas deliveries via TurkStream into Southeast Europe fell in May to just 0.7 Bcm, the lowest volume since June 2022.

The fall is likely a result of much lower demand in the region as temperatures rose.

Supplies via TurkStream will also be impacted in June as both strings of the pipeline are closed on June 5-12 for planned annual maintenance.

As well as Turkey itself, two of the main beneficiaries of gas via TurkStream are Hungary and Serbia, which both still have relatively close ties with Moscow.

Russia's Gazprom said in April it would consider supplying additional gas to Hungary in 2023 and implementing a deferred payment mechanism for any extra gas deliveries.

Hungary agreed a 15-year deal in September 2021 with Gazprom for the supply of 4.5 Bcm/year of gas, but also imported additional volumes of Russian gas in August, September and October last year on top of contracted volumes as it looked to ensure security of supply ahead of the past winter.

Russian gas via TurkStream can also be delivered to Romania, Greece, North Macedonia, and Bosnia and Herzegovina.

Russian deliveries via Ukraine to non-CIS countries totaled 1.07 Bcm in May, up from April, with supplies into Europe at the Velke Kapusany interconnection point relatively steady at some 36 million cu m/d.

The uninterrupted flow of gas into Velke Kapusany comes as European gas prices continue to trend down.

The Dutch TTF month-ahead contract dropped to as low as Eur23.25/MWh in recent days, according to Platts price assessments by S&P Global Commodity Insights, a two-year low.