Record Russian-European gas flows thanks to TurkStream

Russian gas flows to Europe hit a record high in July thanks to exceptional deliveries via the TurkStream pipeline, according to an analysis by S&P Global Commodity Insights. Despite this spike, supplies remain historically low compared to a recent peak in March 2022, with limited deliveries via Ukraine and the European section of TurkStream.

Share:

Russian gas flows to Europe reached a seven-month high in July, thanks to record deliveries via the European section of the TurkStream pipeline, according to an August 2 analysis of data from S&P Global Commodity Insights.

Record Russian gas flows to Europe in July despite historically low supplies

Total Russian pipeline flows to Europe – excluding Moldova – reached 2.28 billion m3 in July, the highest level for pipeline deliveries since December 2022. Despite this increase, supplies from Russia remain historically low and well below the recent monthly peak of just under 10 billion m3 in March 2022.

Russian pipeline deliveries to Europe are currently limited to flows via Ukraine, which enter at the Sudzha point on the Russian-Ukrainian border, and via the European section of TurkStream. Deliveries to Europe have been progressively reduced until 2022, with deliveries via the Yamal-Europe and Nord Stream pipelines halted, and a sharp reduction in deliveries via Ukraine. The two-lane Nord Stream pipeline was then hit by a suspected sabotage attack at the end of September 2022, rendering the system unusable.

TurkStream: Record Russian gas deliveries to Southeast Europe in July, with Hungary and Serbia in the front line

Supplies via TurkStream to Southeast Europe rose sharply in July, reaching a record monthly level of 1.29 billion m3, according to the data. The previous monthly record was 1.28 billion m3 in December 2021. Flows via TurkStream at the Strandzha 2 entry point on the border between Turkey and Bulgaria averaged 42 million m3/day in July, peaking at almost 46 million m3/day on July 14.

Two of the main beneficiaries of gas sent to Europe via TurkStream are Hungary and Serbia, two countries that still maintain relatively close ties with Moscow. Russia’s Gazprom said in April that it would consider supplying additional gas to Hungary in 2023, and set up a deferred payment mechanism for any further gas deliveries. In September 2021, Hungary signed a 15-year agreement with Gazprom for the supply of 4.5 billion m3 of gas per year. It also imported additional volumes of Russian gas in August, September and October last year, over and above contracted volumes, to ensure security of supply ahead of last winter.

Russian gas transported via TurkStream can also be delivered to Romania, Greece, Northern Macedonia and Bosnia-Herzegovina. The pipeline began flowing in January 2020. Russian deliveries via Ukraine to non-CIS countries totaled 1 billion m3 in July. This represents a slight decrease on June, with net deliveries to Europe at the Velke Kapusany interconnection point averaging around 32 million m3/day.

Reverse gas flows in Ukraine: Storage challenges in the face of growing European demand

Regular reverse flows were also observed at Velke Kapusany in July, with gas probably remaining in Ukraine for injection into storage reservoirs. The reverse flow reached up to 9 million m3/d towards the end of the month. In June, Ukrainian authorities said they were already observing injections of stored gas by non-Ukrainian companies after the government proposed using over 10 billion m3 of unused Ukrainian gas storage capacity this summer.

EU gas storage sites are already over 85% full, according to data from Gas Infrastructure Europe, and could run out well before the onset of winter, bringing unused Ukrainian storage capacity into play. Ukraine has a total underground gas storage capacity of around 31 billion m3, but it remains under-utilized. On July 27, the head of storage operator UkrTransGaz said that foreign companies were continuing to “actively” inject gas into Ukrainian storage sites.

“This season we are offering our foreign customers over 10 billion m3 for gas storage, and gas storage tariffs will not be changed until the end of 2024,” said Roman Malyutin.

European traders call for action to take advantage of gas storage opportunities in Ukraine

Last month, network operator GTSOU urged European traders to act “quickly” to use the country’s storage capacity to take advantage of current gas market conditions and the wide gap between summer and winter. Platts, part of S&P Global Commodity Insights, valued the August 1 TTF Winter 2023 contract at 45.63 euros/MWh, a premium of 18.38 euros/MWh to the anticipated monthly TTF price of 27.25 euros/MWh. Ukraine’s gas storage sites have been under-utilized in recent years, although stocks were increased to over 28 billion m3 in the summer of 2020 when European traders used the sites to store excess gas as part of the COVID-19 pandemic.

Italian group Eni signs a twenty-year liquefied natural gas supply contract with US-based Venture Global, covering two mn tonnes per year and marking a first for the company from the United States.
The discovery of the Gajajeira field marks a major step for Angola, strengthening its natural gas development strategy and diversifying national energy resources in a context of sector transition.
The Voskhod vessel, under US sanctions, docked at the Arctic LNG 2 plant in Russia, marking the second visit by a sanctioned ship to the site this year, according to maritime tracking data.
Japan has urgently secured several additional cargoes of liquefied natural gas from the United States to avert an imminent electricity supply shortage caused by rapidly declining national reserves expected at the end of July.
The European Commission has unveiled a proposal to prohibit the import of Russian gas into the Union, sparking intense debate on its feasibility, contractual impact and consequences for supply security among several Member States.
CNOOC Limited announces the discovery of a significant oil and gas reservoir in the buried hills of the Beibu Gulf, opening new opportunities for shallow water exploration off the coast of China.
TotalEnergies’ Mozambique LNG gas project is at the centre of a legal challenge in Washington, following the approval of a $4.7 bn loan by the US Exim Bank, amid security concerns and opposition from civil society groups.
Investors are closely watching U.S. midstream companies’ announcements regarding new gas pipeline expansions targeting promising markets in the West and Northeast, beyond traditional regions in Texas and the Southeast.
PPL Corporation and Blackstone Infrastructure announce a strategic partnership to develop new gas-fired power plants to supply electricity to data centers through long-term contracts in Pennsylvania.
Falcon Oil & Gas Ltd announces a new record initial flow test result at the Shenandoah S2-2H ST1 well and the start of its 2025 drilling campaign in the Beetaloo Basin.
Technip Energies has secured a contract to lead preparatory works for a floating liquefied natural gas unit in Africa, confirming its presence in the international gas infrastructure market.
The Slovak government is seeking guarantees from the European Union to secure its supplies as talks continue over ending Russian gas and adopting a new round of sanctions.
ArcLight Capital Partners announces the acquisition of Middletown Energy Center, a combined-cycle natural gas power plant, aimed at meeting the substantial rise in energy demand from data centers and digital infrastructure in Ohio.
The commissioning of LNG Canada, the first major Canadian liquefied natural gas export facility led by Shell, has not yet triggered the anticipated rise in natural gas prices in western Canada, still facing persistent oversupply.
Horizon Petroleum Ltd. is advancing towards the production launch of the Lachowice 7 gas well in Poland, having secured necessary permits and completed preliminary works to commence operations as early as next August.
European Union member states have requested to keep their national strategies for phasing out Russian gas by 2027 confidential, citing security concerns and market disruption risks, according to a document revealed by Reuters.
TotalEnergies becomes a member of PJM Interconnection, expanding its trading capabilities in North America's largest wholesale electricity market. The decision strengthens the company's presence in the United States.
Turkey has connected its gas grid to Syria’s and plans to begin supplying gas for power generation in the coming weeks, according to Turkish Energy Minister Alparslan Bayraktar.
Despite record electricity demand, China sees no significant increase in LNG purchases due to high prices and available alternative supplies.
US natural gas production and consumption are expected to reach record highs in 2025, before slightly declining the following year, according to the latest forecasts from the US Energy Information Administration.