By Swann Collins, investor, writer and consultant in international affairs – Eurasia Business News. August 13, 2024. Article no 1166

The cost of gas is growing due to fears of possible interruptions in gas supplies to Europe from the Sudzha gas measuring station in the Kursk region. The largest transit corridor of Russian gas supplies to Europe passes through it.

The cost of the September futures at the TTF hub in the Netherlands at the moment increased by 3%, to €42.82 per 1 MWh or $491.02 per thousand cubic meters at the current rate in the forex market, according to ICE Futures data. This is the highest level since December 2023.

The cost of gas is growing due to the risks of interruptions with Ukrainian transit due to possible problems at the gas measuring station (GIS) Sudzha. This route exports a little more than 40 million cubic meters per day or 15.3 billion cubic meters per year. If the export stops, there will be nowhere to quickly redirect these volumes. Then the world supply will decrease – and this provokes an increase in prices.

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Prices are kept high due to concerns about supplies through Russian pipelines, Bloomberg also writes. The constant risk of military operations in the Suji area contributes to an upward trend in gas prices, especially after Ukraine’s recent invasion of the Kursk region of Russia jeopardized an important gas transit point, notes Alexander Miller, consultant in energy markets.

On August 7, Chief of the Russian General Staff Valery Gerasimov reported that the attack of the Armed Forces of Ukraine on the Kursk region began around 5:30 Moscow time on August 6. He called the purpose of the attack “the capture of a section of the territory of the Sudzhinsky district.” Gerasimov reported that the advance of Ukrainian troops in the Kursk region was stopped, and on August 10, the head of the city of Sudzha Vitaly Slashchev said that Sudzha did not fall under the control of the Ukrainian military.

Gazprom continues to supply gas for Europe in transit through Ukraine to the Sudzha GIS in the Kursk region. The largest transit corridor of Russian gas supplies to Europe passes through this GIS. According to Trading Economics, Gazprom will supply 39.6 million cubic meters of gas to Europe through Ukraine on Monday, which is slightly higher than 39.3 million cubic meters the day before.

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The fact that the events in the Sudzhi area led to an increase in prices for both natural gas and LNG was noted by the official representative of Gazprom Sergei Kupriyanov. “The question arises: who benefits from it?” asked Kupriyanov.

At the same time, the representative of Gazprom noted that another factor in the growth of exchange gas prices could be planned and preventive work at the facilities of the Norwegian gas industry.

As Bloomberg notes, due to the rise in gas prices in the crucial season of stockpiling, it is likely that the United States will send more liquefied natural gas to Europe. According to data collected by Bloomberg, LNG imports to Europe fell in July, while Asia has received the most monthly cargo from the United States since 2021.

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© Copyright 2024 – Eurasia Business News. Article No. 1166.