By Alexander Miller, for Eurasia Business News – September 18, 2021
The price of the nearest (October) futures on the TTF spot gas index on the ICE Futures exchange on September 14 morning reached 65.5 euros per kWh, or $ 800.2 per thousand cubic meters, according to the exchange data.
The historical perspective of comparing current nautral gas price peaks rests on the soaring of quotations in March 2018 to a thousand dollars per thousand cubic meters, when the legendary cold front raged in Europe.
In August 2021, the average value of a day-ahead contract on TTF spot gas index was $ 533, in early September – already $ 669 per thousand cubic meters. Since the beginning of the year, the average price of a day-ahead contract on TTF was $ 346 per thousand cubic meters.
A day earlier, the German Federal Network Agency (Bundesnetzagentur) announced that it had received documentation for certification of Nord Stream 2 AG as an independent gas transmission operator. The decision will take four to six months.
The main factor behind the rise in natural gas prices is the low level of gas reserves in underground storage facilities in Europe with its limited supply through pipelines and in liquefied form. The main reason of this low level of reserves is the strong economic slowdown in 2020 due to the coronavirus pandemics. Energy operators have been waiting for the recovery to buy natural gas.
A little more than a month remains before the transition from injection to withdrawal from underground storage facilities, and the level of reserves barely exceeded 70%. On Sunday morning, reserves stood at 70.75%, down 15.6 percentage points from the five-year average.
Since the end of August, the Russian energy company Gazprom has stopped pumping gas into the German underground storage facilities Rehden and Katarina, and continues limited pumping into the Austrian Haidach, the German Jemgum and Bergermeer in the Netherlands.
Rising prices are helping Europe to compete for liquefied natural gas flows. The inflow of LNG to the terminals of the region in September is growing in relation to August by about 16%.
The construction of the Nord Stream 2 gas pipeline intends to double the gas transmission capacity from Russia to Western Europe began in April 2018. Gazprom announced that the 1,200 kilometers-long pipeline was completed on September 10, in spite of US government’s pressure and sanctions against this project. The natural gas transport should take place by the end of 2021 : October 1st for the first line, December 1st for the second.
Exchange rate as of September 17, 16:00 UTC : 1 EUR = 1.17 US Dollar
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