Russia’s pipeline gas flows to Europe hit a seven-month high in July, driven by record deliveries via the European string of the TurkStream pipeline, an analysis of data from S&P Global Commodity Insights showed Aug. 2.

Total Russian pipeline flows to Europe — excluding Moldova — reached 2.28 Bcm in July, the highest level for pipeline deliveries since December 2022.

Despite the increase, supplies from Russia remain historically low and are still well down on the recent monthly peak of just under 10 Bcm in March 2022.

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.

Supplies to Europe were gradually reduced through 2022, with deliveries halted via the Yamal-Europe and Nord Stream pipelines, and supplies sharply curtailed via Ukraine.

The two-string Nord Stream pipeline was subsequently hit by a suspected sabotage attack in late September 2022, rendering the system unusable.

TurkStream high

Supplies via TurkStream into Southeast Europe rose strongly in July, reaching a record monthly high of 1.29 Bcm, the data showed. The previous monthly record level was 1.28 Bcm in December 2021.

Flows via TurkStream at the Strandzha 2 entry point on the Turkey-Bulgaria border averaged 42 million cu m/d in July and hit a peak of almost 46 million cu m/d on July 14.

Two of the main beneficiaries of gas sent to Europe via TurkStream were Hungary and Serbia, both of which 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 signed 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. The pipeline began flowing gas in January 2020.

Ukraine storage

Russian supplies via Ukraine to non-CIS countries totaled 1 Bcm in July, down slightly from June, with net deliveries into Europe at the Velke Kapusany interconnection point averaging around 32 million cu m/d.

There was also regular reverse flow at Velke Kapusany in July, with gas likely staying in Ukraine for storage injection. Reverse flow reached as high as 9 million cu m/d toward the end of the month.

In June, Ukrainian officials said they were already seeing gas storage injections by non-Ukrainian companies after the government offered the use of more than 10 Bcm of spare Ukrainian gas storage capacity this summer.

EU gas storage sites are already more than 85% full, according to data from Gas Infrastructure Europe, and could top out well before the start of winter, bringing spare Ukrainian storage capacity into play.

Ukraine has a total of some 31 Bcm of underground gas storage capacity but it remains underutilized.

On July 27, the head of storage operator UkrTransGaz said foreign companies continued to “actively” inject gas into Ukrainian storage sites.

“This season we are offering our foreign customers more than 10 Bcm for gas storage and gas storage tariffs will not be changed until the end of 2024,” Roman Malyutin said.

Last month, grid operator GTSOU urged European traders to act “promptly” to make use of the country’s storage capacity in order to take advantage of current gas market conditions and wide summer-winter spread.

Platts, part of S&P Global Commodity Insights, assessed the TTF Winter 2023 contract on Aug. 1 at Eur45.63/MWh, a premium of Eur18.38/MWh to the TTF month-ahead price of Eur27.25/MWh.

Ukraine’s gas storage sites have been underutilized in recent years, though stocks were built to more than 28 Bcm in the summer of 2020 when European traders used the sites to store surplus gas amid the COVID-19 pandemic.

Source: Platts