Consignors – which can only be Gazprom – have not been interested by offers of additional capacities for gas transportation through Ukraine for June from Gas Transmission System Operator of Ukraine (GTSOU).
Gazprom has a long-term reservation of Ukrainian capacities in the volume of 40 billion cubic meters for 2021, which is equal to 109 million cubic meters per day. The company additionally booked 15 mcm at auction on May 17, giving a total of 124 mcm per day.
GTSOU offered an additional 63.7 mcm per day at the monthly auction on Tuesday; however, there were no bids for this. The outcome of the last major additional auction a month ago was the same.
The announcement of this auction – with the prospect of significant supply growth on the European market – and its outcome have a substantial influence on spot prices for gas on the European market. They reduce under pressure of the appearance of potential new supply and rebound following an unsuccessful auction. Meanwhile, Gazprom prefers not to comment on its plans regarding short-term reservation of Ukrainian capacities.
Gazprom is currently pumping 124 mcm per day on average through Ukraine, fully using the volume booked.
If Gazprom had accepted the offer to use additional transit capacities, it would have meant a return to transportation volumes through Ukraine of 2019, before the new transit contract and payment of $3 billion to Naftogaz in line with a Stockholm arbitration ruling.
Europe is currently dramatically increasing gas consumption. Global supplies of liquefied natural gas and pipeline gas from Russia are at their highest levels, but this so far impedes the start of mass replenishment of gas in underground storage facilities to prepare for next winter.
