Russian gas flows into Europe plunge in January amid Ukraine tensions

Russian gas flows to Europe fell further in the first month of 2022 having already been curtailed toward the end of last year, an analysis of flow data from S&P Global Platts Analytics showed Feb. 2.

Russian pipeline exports to Europe in January via its four main corridors -- Nord Stream, Yamal-Europe, Ukraine and the TurkStream string to Europe -- totaled just 7.1 Bcm, the data showed.

Deliveries were down across the board, with even the first Nord Stream system flowing below capacity, and came as tensions intensified between Moscow and the West over the build-up of Russian troops at the Ukrainian border.

A significant factor in the lower flows was the continued use in January of the Yamal pipeline in reverse mode eastward from Germany to Poland, resulting in a dramatic fall in Russian deliveries via Belarus.

Flows began to reverse in late December at the Mallnow interconnection point and have remained eastward into February.

Deliveries were also sharply down last month via Ukraine and also through the TurkStream pipeline string to Europe, which saw supplies dip back below 1 Bcm.

The lower Russian deliveries, which tally with Gazprom's own data showing a continued low level of gas sales in Europe last month, lent support to European gas prices.

The average TTF day-ahead price in January was Eur81.86/MWh, more than four times higher than the average in January 2021 of just Eur20.30/MWh, according to S&P Global Platts price assessments.

Supplies via Russia last month may also have been affected by the contract price for Russian gas becoming less competitive versus European hub prices as the high prices from Q3 last year begin to filter through to Gazprom's long-term contracts.

Russian long-term supply contracts are often priced with a six- to nine-month time lag.

February increase?

Russian flows in February may turn out higher than last month after flows via Nord Stream returned to their usual flow rate on Feb. 1 and deliveries via Ukraine at the Velke Kapusany interconnection point also rose.

Under arrangements finalized in December 2019, Gazprom agreed to transit 65 Bcm of gas via Ukraine in 2020 and 40 Bcm/year in the period 2021-2024, well down on a recent transit peak of 94 Bcm in 2017.

In 2021, Gazprom delivered 41.6 Bcm of gas via Ukraine, having topped up its contractual obligations with some shorter-term bookings.

The Yamal-Europe route is also now subject to spot bookings after the long-term transit arrangements expired in 2020.

Supplies via TurkStream in January fell compared with December, with supplies down in particular in the first two weeks of the month.

Deliveries picked up in the second half of the month, but were still shy of the flows of up to 43 million cu m/d seen toward the end of 2021, the Platts Analytics data showed.

Total gas deliveries into Southeast Europe via TurkStream in 2021 amounted to 11.6 Bcm, the data showed, or an average of 32 million cu m/d.

The start in January 2020 of the two-string 31.5 Bcm/year TurkStream pipeline triggered an unprecedented reshuffle in the way Russian gas reaches Southeast Europe.

One of the 15.75 Bcm/year strings feeds directly into the Turkish market, replacing volumes previously delivered via Ukraine in the Trans-Balkan pipeline, for which data is not available, while the other 15.75 Bcm/year string enters Bulgaria at Strandzha.

Initially, gas mostly either stayed in Bulgaria or was transited to Greece and North Macedonia, with small volumes also moving into Romania.

However, since the start of 2021, Russian gas sent via TurkStream is also now transited onto Serbia, Bosnia and Herzegovina, with Hungary also supplied via the new route since October.