For a moment there was hope for the gas price. Until after the stock market closed on Friday evening, the bad news came that the main gas pipeline from Russia to Europe will not reopen after all. In addition, Norway, our new main supplier, is planning maintenance work. “There is only one logical market response: that gas prices go up again.”
Yesterday at 21:19
220 euros per megawatt hour, more than a third less than the record price of 317 euros a few days earlier. For example, the natural gas exchange TTF closed on Friday evening. So hopeful, partly because Germany had its gas supplies replenished faster than expected.
“Not anymore for this winter”
But then, probably not entirely coincidentally, so late, says energy expert Thijs Van de Graaf (UGent), the news from Russia that the main Nord Stream gas pipeline to Europe will not reopen as planned. “Gazprom announced last minute that they are experiencing a leak and that they don’t know when they can fix the problem. Some traders are even taking into account that this will no longer be for this winter. There is only one logical market reaction: that prices will go up again.”
On Saturday, 42.7 million cubic meters of natural gas flowed through Ukraine to Europe through another pipeline, but not enough to compensate for the closure of Nord Stream 1.
“Far from geopolitical game”
Hopes for improvement are also very much dampened by reports that Norway, our new main gas supplier, will be carrying out maintenance work on 13 gas fields and processing plants in September. “Of course, this is far from a geopolitical game. The Norwegians are really doing their best to supply us. But such maintenance is done annually and is really necessary,” explains Van de Graaf. “It’s just really bad right now. Normally you don’t notice this, but now that so many taps have been turned off, we will feel it extra hard. Even the smallest incident such as a fire in an LNG terminal can be felt in this tight market.”
If Van de Graaf has to predict where these prices will go, he creates a pessimistic picture for the future. “In some scenarios, we will face major gas shortages towards the end of the winter. This is possible if the stocks are used up due to a lack of influx. Moreover, the history of stock replenishment as we now know it will repeat itself again next summer. The forward prices for the coming months have already risen enormously. Price increases will continue, according to some at least until 2024.”