The loss of the 158 million cu m/d Nord Stream
line last month was only partly offset by increased flows via Ukraine, while flows via Belarus were also constrained last month by maintenance, an analysis of S&P Global Platts Analytics data showed.
Pipeline flows to all of Europe (excl. the countries of the former Soviet Union) through the Nord Stream pipeline, the Yamal-Europe corridor and via Ukraine totaled 12.61 Bcm in July, or an average of 407 million cu m/d, according to the data.
That is the lowest level since July 2018 when work on Nord Stream and the Yamal line similarly affected flows. July's exports compare with average Russian flows to Europe of 464 million cu m/d in June and 496 million cu m/d in May -- when deliveries hit a 14-month high.
The strong deliveries in May and June were on the back of strong demand for storage injections in Central and Eastern Europe, and significant sales on Gazprom Export
's Electronic Sales Platform (ESP).
ESP July delivery
ESP sales for delivery in July were 1.23 Bcm, accounting for 10% of the total volume supplied to Europe, below volumes sold on the ESP for June delivery, which were 1.62 Bcm -- 12% of the total Russian pipeline flows to Europe.
ESP sales for August delivery are already higher than July at 1.42 Bcm, with much of the month left for prompt sales. Despite stubbornly low prices on European hubs, Gazprom said in May that it would continue to offer high volumes on the ESP, saying it was "comfortable" with the volumes sold on the platform.
Platts Analytics said Russian flows would recover in August, with higher ESP sales boosting overall deliveries. "Russian imports are expected to rise month on month in August," it said.
"A significant amount of ESP sales for August delivery for both northwest Europe and Central and Eastern Europe is expected to counteract the effect of reduced contractual nominations."
Flows via the Nord Stream pipeline to Germany fell to just 2.86 Bcm in June -- or an average daily flow rate of 92 million cu m/d. Gas flows through the Yamal-Europe corridor via Belarus into Poland in July were flat on the month, with volumes totaling 2.79 Bcm. Supplies were affected by maintenance in both months.
Total flows via Ukraine -- incl. those at interconnection points on the borders with Poland, Slovakia, Hungary and Romania -- were 6.82 Bcm in July, up from 6.31 Bcm in June.
The additional 0.5 Bcm flowed through Ukraine
was not enough to offset the near 2 Bcm drop in Nord Stream flows. Gazprom also used its storages in Europe -- such as Rehden in Germany -- to meet customer nominations during July.
Flows via the main Velke Kapusany point on the border between Ukraine and Slovakia rose to 4.85 Bcm last month, while net flows via the Beregdaroc interconnection point between Ukraine and Hungary dipped slightly to 0.97 Bcm.
Russia also supplied 144 million cu m of gas to Finland via the Imatra interconnection point in July, according to data from European transmission system operators' body Entsog.
All volumes are converted to the standard European measurement of 40 MJ/cubic meter at 15 C. Gazprom also supplies gas via the Blue Stream pipeline directly to Turkey under the Black Sea, but no flow data was available.
Gazprom's own sales data showed supplies to the Far Abroad (Europe + Turkey, but not the countries of the former Soviet Union) in July totaled 16.2 Bcm (an average of 523 million cu m/d), according to Platts estimates.
The volumes also include sales via Blue Stream to Turkey and sales from storage sites in Europe. Gazprom
said sales to several selected European countries in the 1st 7 months of the year increased year on year, including to Hungary (+58.4%), Austria (+30.6%), the Czech Republic (+41.5%), Slovakia (+28.1%), the Netherlands (+10%) and France (+3.5%).
Russian long-term contract gas is facing strong competition from the hubs as European prices continue to come under pressure from strong pipeline supplies, robust stocks and steady LNG imports.
European hub prices are currently significantly cheaper than the bottom of the 85%-100% oil-indexed range having dropped out of the range in February. TTF prices remain well below the bottom of the range until the start of 2020 when it closes in on the bottom of the oil-indexed range.
By Q4 2020, TTF month-ahead prices move into the range given the impact of the falling oil price taking effect with the typical time lag of 6 to 9 months. However, oil indexation has much less relevance in European import contracts than it once did.