Natural gas prices in Europe settled at the lowest level since the start of the war in Ukraine, as imports of liquefied natural gas help to replenish stockpiles and ease concerns over supply.
Benchmark front-month Dutch futures closed 3.7% lower at 91.02 euros per megawatt-hour, the lowest settlement price since Feb. 23—the day before Russia’s invasion. The UK equivalent fell 7.3%.
At least 10 LNG tankers are expected to reach European ports by month-end, ship-tracking data on Bloomberg and port data show. Separately, buyers of Russian gas are still weighing how to pay for the fuel—which Moscow has decreed must be done in rubles—without breaching sanctions.
Europe’s gas inventories have risen to near their seasonal levels after falling to historic lows over the winter. Companies are pumping the fuel into stockpiles to guard against any potential disruption from Russia, the continent’s top supplier.
Storage sites were almost 41% full on Tuesday, close to the 44% five-year average. That’s up from 33% at the beginning of the month, according to Gas Infrastructure Europe.
European Union lawmakers and nations reached a deal to set a minimum natural-gas inventory level before winter. Storage operators will have to keep a minimum 80% level before Nov. 1, increasing to 90% for subsequent winters.
The market remains wary, with payment deadlines for Russian gas fast approaching. Moscow has already cut off supplies to Poland and Bulgaria, and Finland has said there’s a “real risk” that flows will end this week as it’s refusing to pay in rubles.
Some other buyers in the region, including Eni SpA and Uniper SE, see the possibility of being compliant both with Moscow’s demand and EU sanctions. Eni said this week it was opening accounts in both euros and rubles with Gazprombank JSC to keep gas flowing. Russian Deputy Prime Minister Alexander Novak said Thursday that about half of the 54 buyers of gas have opened these accounts.
Alternative Supplies
Companies are also making alternative arrangements. Uniper, one of the largest Russian gas buyers, is expanding its LNG portfolio and procuring additional volumes from various countries, according to Chief Executive Officer Klaus-Dieter Maubach. “In this way, we are helping to make Germany’s energy supply more secure,” he said at the company’s annual general meeting Wednesday.
Italy’s Eni has secured LNG supplies from Africa.
Meanwhile, Russian gas shipments to Europe through Ukraine were expected to edge higher on Thursday based on orders, but are still lower than usual. Supplies via Nord Stream, the biggest gas pipeline from Russia to Europe, remain stable.
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