European Gas Storage at 90% Full, Ukraine Also Rising

Europe's gas storage facilities were 89.90% full August 18, according to data published by Gas Infrastructure Europe, with 995.64 TWh already injected out of a total possible 1,107 TWh. There are another two months or so of injection still remaining, although as the pressure in the facilities reaches maximum the injection rate slows down.

This time last year there were 977.4 TWh of working gas in store, but there was less cheap gas available then than now: this year has seen record amounts of LNG seeking a home at almost any price. This has begun to tail off with US cargoes being cancelled in the last few months owing to negative spreads relative to the Henry Hub, after allowing for liquefaction, shipping and regasification.

Not all the excess LNG has ended up in European storage: power generation has used more gas in a number of countries this year than last, again owing to the low price relative to competing fuels. Its price advantage is increased by the carbon emissions price, which weighs more heavily on coal.

But demand generally has been lower, owing to lockdowns affecting industrial output and to the mild weather in January-March. Europe's biggest gas consuming country Germany, for example, took 4.6% less gas overall in the first half of the year than it did in the same period last year, according to analysts at Ageb.

Russia and Norway have both been holding back production until prices rise, so deliveries to Europe so far this year have been lower than last year.

Ukraine's storage stocks are also rising steadily and stood at 253.8 TWh as of August 18, up from 221.2 TWh July 18 and from 198.4 June 18 – meaning the injection rate increased by about a half between June-July and July-August. More interruptible capacity has been made available in the major Slovakia-Ukraine pipeline from July 1. Last year storage peaked in Ukraine at around 228 TWh on November 1. Ukraine's total working gas capacity is 320.3 TWh but that has not been needed for decades, when it belonged to Russian gas monopoly Gazprom.