Reference prices of natural gas on the European market rose on Thursday to the highest level since December, due to fears about possible disruptions for the transit through Ukraine, reports Bloomberg.
At the TTF gas hub in Amsterdam, where reference prices are set in Europe, natural gas futures quotes rose by 1.4% at noon on Thursday, to 38.99 euros for a Megawatt-hour (MWh). Since the beginning of April, prices have risen by approximately 40%, according to Agerpres.
It is the third day of increase in quotations, which are approaching 39 euros for one MWh.
Fighting continued on Thursday in the Russian region of Kursk, on the third day of a major incursion by Ukrainian troops, supported by mechanized units. According to several analysts, Ukrainian troops are concentrating their advance around Sudja, a town of about 5,500 inhabitants, located about 10 km from the border and near which there was a transshipment station for Russian gas to Europe via Ukraine. Although the extent of the Ukrainian advance is not clear, the Russian energy giant Gazprom assured on Thursday that it will continue to deliver gas through its Sudja station, writes Bloomberg.
Europe reduced its dependence on Russian pipeline gas after the start of the war, increasing imports of liquefied natural gas (LNG). However, some countries still depend on pipeline flow, so their economies are vulnerable to sudden supply disruptions.
“There is still pipeline gas supply that could stop immediately. Although it can be overcome this winter without a dangerously low level of gas stored in storage facilities, it would be very difficult to fill them to an adequate level in 2025.” appreciated James Waddell, from Energy Aspects Ltd.
The transit agreement between the two countries expires at the end of the year, so Russian gas will no longer be delivered through pipelines. But in a sign of the importance of Russian gas to the continent, European officials are negotiating to try to keep gas flowing through pipelines after the deal expires.
However, a sudden and earlier-than-expected shutdown of flows would be a shock to countries such as Slovakia and Austria, which are currently dependent on pipeline gas and could face higher prices for companies and consumers if I stop deliveries.
Norway, Europe’s main gas supplier, is due to carry out lengthy maintenance work at the end of this month, which could add to the volatility of the gas market.