ICIS: New Nord Stream natural gas volumes to impact German trading dynamics

The start of natural gas flows through the second string of the Nord Stream pipeline on Monday will add another major supply source to Germany's GASPOOL market area and is expected to somewhat change trading dynamics at the hub.

Most of the Nord Stream volumes sent via the first string which was commissioned in November 2011 come from existing long-term, oil-indexed contracts, and do not enter the spot market, but consortium majority shareholder Russian Gazprom has said the second string is likely to see new gas flow to Europe.

This means that at least part of the gas coming through the second string will be new volume entering the German market. Some traders have said they have been taking short positions on the curve in view of the second string's launch, assuming that the additional volumes will put pressure on prices. With both strings fully operational, Nord Stream's two lines will have the capacity to transport 55 billion cubic metres/year (Gm³/year) of Russian gas to Germany.  MORE