The future of Russian natural gas transit through Ukraine remains one of the main uncertainties for gas prices in Europe, even as the continent heads into winter with full gas storages, and market uncertainty could persist into 2027, TotalEnergies CEO Patrick Pouyanne, according to Reuters.
The transit agreement on the delivery of Russian gas to Europe via Ukraine, which last year allowed the delivery of 15 billion cubic meters of the EU’s total gas consumption of 295 billion cubic meters, is due to expire at the end of the year. Ukraine has announced that it will not extend this agreement. In addition, there are some concerns that Russian gas supplies could be stopped prematurely, in the context of the fighting in the Kursk region of Russia, where the Sudzha point where Russian gas enters Ukraine is located, according to Agerpres.
“One of the main factors concerns this transit for Ukraine, because even if the warehouses are full, I am not sure that we are fully covered if this transit is interrupted,” Patrick Pouyanne said in an interview with Reuters, on the occasion of a conference on organized energy in Norway.
The degree of filling of gas storages in Europe was last at 91.2%, having reached the target set for November 1 two months earlier, according to the data provided by Gas Infrastructure Europe.
Europe’s gas market will continue to be volatile because there is not much new supply to be added, Pouyanne said, noting in particular the delays at a number of new liquefied natural gas projects such as Golden Pass in the US .
“So we are still in a phase where we don’t have much margin in terms of energy supply,” Pouyanne added. This situation is likely to persist until 2027, said the general director of TotalEnergies.
At the gas hub in Amsterdam, where reference prices for Europe are set, the contract with delivery in the following month was traded on Monday at 37.03 euros for one Megawatt hour (MWh). At the beginning of the month, this reference price passed 40 euros for a Megawatt hour, the highest level since December 2023, amid concerns that the transit of Russian gas could be stopped due to the fighting in Kursk.