Nord Stream outage priced into German/Dutch gas hubs

Julie Fisher

12-Aug-2015

German and Dutch natural gas prices rose only slightly in response to Tuesday’s planned outage on the Russian Nord Stream pipeline, with traders saying any supply tightness was already priced in.

Nord Stream will be offline for annual maintenance until 20 August. On Monday, the day before the works began, flows through the pipe totalled 118 million cubic metres (mcm), around a third of Germany’s overall imports.

The GASPOOL Day-ahead contract recorded the largest session-on-session gain on the first day of maintenance, rising by €0.188/MWh between Monday-Tuesday. Greifswald, where Nord Stream gas arrives in the EU, is located in the GASPOOL market area. Here it connects to the NEL and OPAL pipelines, with gas flowing west towards the Netherlands via NEL and south towards the Czech Republic via OPAL.

The NCG Day-ahead rose by €0.138/MWh on Tuesday, while the Dutch TTF equivalent gained just €0.012/MWh, according to ICIS assessments.

When Nord Stream was last fully offline for maintenance, between 24 June-4 July 2014, the NCG Day-ahead product rose by €0.60/MWh on the first day of the works, while the equivalent GASPOOL and TTF products gained around €0.50/MWh.

Traders had said the maintenance would have little effect on prices this year, as they had been informed of the outage in advance, allowing them to price this into contracts.

“The maintenance is a non-event,” one trader said, while another added that the impact had been more significant in the previous year due to concerns over Russia being dependent on the Ukrainian transit route. Market participants are now less concerned about the prospect of disruption of Ukrainian transit flows, as EU deliveries have not been affected by the crisis within the country.

During last year’s maintenance period, Gazprom increased transit flows through Ukraine by around 10% to an average rate of about 205mcm/day.

On Tuesday, Slovakia received 125mcm of gas from Ukraine through the Velke Kapusany border point, according to data from Slovak TSO Eustream. This was up from 110mcm on Monday, before the start of the maintenance, and was expected to increase further to 130mcm on Wednesday.

Russia also exports gas to Germany through the Yamal pipeline via Belarus and Poland. A compressor fault at Mallnow, where Yamal enters Germany, restricted flows from 15:00 Berlin time on Tuesday, with flows briefly dropping to a rate of 0.03mcm/day between 17:00-18:00. However, the issue was quickly resolved, and by 23:00 the pipeline had returned to its prior flow rate of 83mcm/day. julie.fisher@icis.com

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