As the global gas industry prepares to meet at the major Gastech conference being held in Dubai next week, the state of the European gas market couldn't be more precarious.
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Last summer, the market was beginning to consider the possibility of negative prices amid significant oversupply, full storage sites and weak spring demand triggered by the COVID-19 pandemic.
Now, the tables have completely turned.
European gas prices are at record levels, with the fuel in high demand globally, amid very low European storage levels following a cold and protracted winter.
The market has also gained support from soaring carbon prices and numerous supply curtailments, from LNG production facility outages to subdued Russian gas flows via Ukraine and Belarus.
Many have been quick to blame Russia in part for the high prices and tight market in Europe, seeing the lower flows via Ukraine as an attempt by Moscow to force Europe's hand to allow the controversial Nord Stream 2 pipeline first to be completed and then to begin commercial flows.
S&P Global Platts Analytics' analyst Ornela Figurinaite said decisions around Nord Stream 2 and associated Russian exports would be key to European balances in the coming months.
"It is clear that the extreme European market tightness, at least in part due to lower-than-expected Russian flows, increases demand for Gazprom's long-term contractual flows and puts pressure on European authorities to push through the Nord Stream 2 agenda," Figurinaite said.
Whether Nord Stream 2 is quickly approved for use and, if so, to what extent it will help meet Europe's thirst for gas remains to be seen, however.
"Beyond hoping for mild weather there is no one clear solution to our balancing needs this winter, not even Nord Stream 2," Platts Analytics said in a recent report.
Gazprom, meanwhile, has been operating within its rights and complying with its contractual obligations.
The European Commission -- which has been critical of Russia's gas market behavior in the past -- was part of talks that resulted in Gazprom booking just 40 Bcm/year of transit via Ukraine in 2021-24.
Gazprom therefore has no obligation to book more short-term capacity via Ukraine if it doesn't want to.
It is so far also meeting the requests of its long-term customers in Europe for gas.
Some in the market argue that the EC should somehow intervene and ask Russia to supply more gas to Europe, but gas procurement is not part of the EC's mandate, so coordinated action is unlikely.
Meanwhile, under the energy security pact reached by the US and Germany in July, it was agreed that sanctions could be imposed on Russia and on Nord Stream 2 if Moscow used gas as a "weapon."
But does supplying gas in accordance with customer nominations and in accordance with its five-year Ukrainian transit deal mean it is using gas as a weapon? It would be hard to prove.
And in any case, imposing sanctions against the Russian gas sector once Nord Stream 2 is operational would hurt Europe too, in the midst of the record high gas prices.
It could be argued that Russia seems to be acting a little like its own "gas OPEC" at present, following its own value-over-volume strategy by not putting spare gas volumes into Europe to help meet demand.
In theory, it has the spare capacity to sell more in Europe at the hubs or on its own Electronic Sales Platform. According to Platts calculations, Gazprom will end 2021 with around 40 Bcm/year of spare capacity.
In August, Gazprom said it expected to produce 510 Bcm of gas in 2021, a 10-year high, having previously suggested its production capacity was around 550 Bcm/year.
Gazprom has had work to do at home too -- it was hit by a fire at a gas processing plant in August and has also been busy filling its domestic storage sites that were drawn down to very low levels the past winter.
This requirement, it said, was "well understood" by its European colleagues.
In May, Gazprom said it would build its gas storage stock levels in Russia to a record high 72.6 Bcm this summer ahead of the next heating season.
It started the summer injection season at just 11.7 Bcm, meaning it had more than 60 Bcm to add. Officials say stocks will be built to target by Nov. 1 at the latest.
Gazprom's storage sites in Europe, meanwhile, are almost empty and it is thought to be waiting for Nord Stream 2 to start up in order to fill them over the winter.
European storage levels as a whole will remain a major concern heading into the winter. As of Sept. 10, EU stocks were built to just 70% of capacity, compared with 93% at the same time last year.
A cold winter could also tighten an already struggling supply outlook, with LNG continuing to be pulled to Asia by the sky-high JKM spot LNG price, which Platts assessed at $23.19/MMBtu on Sept. 14.