Russian gas still reaching Austria despite OMV cut-off, data shows
PRAGUE/MOSCOW, Nov 18 (Reuters) - Russian gas was still reaching Austria on Monday despite Gazprom cutting off flows to top Austrian importer OMV over the weekend due to a contractual dispute, data flows showed.
Gazprom on Saturday halted supplies to OMV after the Austrian company threatened to impound some of the Russian state firm's gas as compensation for an arbitration it had won over a contractual dispute but overall daily supply to Europe via Ukraine remains at around the same volume as normal.
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Before the Ukraine invasion, Russia was the main supplier of pipeline gas to the European Union, but its share of the market has significantly shrunk as the EU has sourced alternative supplies from Norway, the Middle East and the U.S.
The transit line through Ukraine is one of the two remaining routes for Russian pipeline gas to the EU and is expected to close at the end of the year as Kyiv has said it does not want to extend the transit contract with Gazprom.
Austria had been receiving 17 million cubic metres (mcm) per day before the cut-off, and those volumes are now finding new buyers in Europe. Russian gas is typically still cheaper than from other sources.
The so-called Urengoy-Pomary-Uzhgorod pipeline takes gas from Russia through Ukraine to Slovakia where it can then go to Austria and the Czech Republic.
Flows from Slovakia to Austria were around 27 million cubic metres (mcm) per day before Gazprom supplies to OMV were stopped on Saturday and then fell by around 17% to around 22.6 mcm/day on Sunday, according to preliminary data from the Slovakian transmission system operator Eustream.
Nominations for planned shipments are for 22.3 million cubic meters for Monday from Slovakia into Austria, data form Eustream showed. Partial preliminary data showed around a third of that amount had already gone through since the morning.
Austria's OMV had been receiving about 17 mcm/day from Gazprom before the cut-off, and those volumes are now finding new buyers or middlemen in Europe who stepped in to snap up unsold gas, companies and sources said, and data showed.
It was not clear who was buying the gas and possibly reselling the volumes previously delivered to OMV.
Gazprom on Saturday halted supplies to OMV after the Austrian company threatened to impound some of the Russian state firm's gas as compensation for an arbitration it had won over a contractual dispute.
Russian gas is still being sold in significant volumes to Slovakia and Hungary, as well as to the Czech Republic which does not have a direct contract. Smaller volumes are going to Italy and Serbia.
Slovakia's state-owned gas company SPP, which has a long-term contract with Gazprom for its Slovak consumers, did not respond when asked if it was buying some of the volume that would usually go to OMV, for trading or other purposes.
WHO IS BUYING?
Separately, flows of gas from Slovakia to the Czech Republic have risen sharply to 74% of the total Czech imports since Oct. 1, although Czech companies do not have any contracts with Gazprom.
Traders and analysts said this may be gas originating in Russia and delivered via the Turkstream pipeline or Ukraine, which may be in surplus due to full storage sites, and also cheaper to deliver to the Czech Republic than gas from the West because of a German levy which makes transit expensive.
Two major Czech gas buyers told Reuters they were not buying Russian gas. But one of those two buyers and an energy market analyst said Czech companies' trading partners may in effect be doing so by buying gas on the market and delivering it to the Czech customers from the east.
Dutch and British wholesale prices fluctuated on Monday, supported by colder weather forecasts and a drop in Norwegian supply, but capped by Russian flows via Ukraine remaining stable and more liquefied natural gas (LNG) cargoes heading to Europe.
The benchmark front-month contract at the Dutch TTF hub was up 1.18 euro at 46.90 euros per megawatt hour by 1618 GMT.
The LNG price for January delivery into northeast Asia LNG-AS rose to $14.20 per million British thermal units (mmBtu) on Friday from $13.60/mmBtu the previous week.
At least five cargoes of liquefied natural gas have diverted from Asia to Europe in the past few days, drawn by higher gas prices on the continent after Russia's Gazprom halted supplies to Austria's OMV, data from analytics firm Kpler showed.
(Reporting by Vladimir Soldatkin in Moscow; Jan Lopatka and Jason Hovet in Prague; Nora Buli in Oslo; Writing by Nina Chestney; Editing by Mark Potter, Susan Fenton and David Evans)