Central Eastern Europe – Dec 2017

Published at 16:18 9 Jan 2018 by . Last edited 17:32 9 Jan 2018.

Mild weather and strong Russian pipeline supply helped curb the stockdraw in the Baumgarten region last month, increasing the y/y storage surplus.

HDDs in the Baumgarten region were between 5% and 15% lower y/y except for in Austria, where they were up by 7% y/y. But even the Austrian stockdraw was lower y/y owing to strong pipeline supply.  Total Russian flows into Europe were greater by 1.46 bcm (11%) y/y at 14.77 bcm. Most of the increase was owing to Gazprom taking advantage of greater OPAL access, with German deliveries up by 1.10 bcm (28%) y/y. That, in turn, supported a 22% (0.58 bcm) y/y increase in gross German exports into the Czech Republic. Russian exports into Slovakia and Hungary also rose, by 0.27 bcm (9%) y/y and 0.23 bcm (51%) y/y, respectively. Strong imports at Velke Kapusany supported a 0.58 bcm (19%) y/y rise in Slovakian exports into Austria, which led to a 0.54 bcm (22%) y/y increase in exports from Austria into Italy. Despite a huge explosion at the Baumgarten compressor station on 12 December, Austrian exports to Italy resumed the next day.  

In addition to strong Russian supply, slower reverse flow exports into Ukraine from the region helped ease the Baumgarten stockdraw last month. Hungary exported just 0.13 bcm to Ukraine, 90 mcm (42%) less y/y and the lowest monthly total since March 2017. Gross exports into Ukraine from Slovakia also fell sharply, by 0.62 bcm (42%) y/y to 0.66 bcm. Weather in Ukraine was very mild last month, with HDDs 24% lower y/y and 20% below the five-year average. Ukrainian stocks ended December at 14.6 bcm, up by a chunky 2.7 bcm y/y.  

In total, the Baumgarten region pulled 3.8 bcm from stocks last month, 0.74 bcm less y/y. As of 6 January, stocks stood 2.9 bcm higher y/y at 16 bcm.

The TTF-AVTP D+1 basis averaged +7 cents/MWh in December 2017, a reversal from the -21 cents/MWh it averaged in November 2017 and -71 cents/MWh in December 2016, pointing to the different weather patterns between central and NW Europe. HDDs in the Netherlands were 2% higher y/y and up by 10% against the five-year average, boosting demand there. In addition, UKCS supply constraints because of the Forties Pipeline System outage tightened the UK supply-demand balance and moved the UK to call more heavily on northwest continental supply, supporting NW European hub prices.

In terms of LNG in the region, data from Kpler indicate that LNG imports into Poland were 0.14 bcm in December, while Lithuania received 82 mcm, both unchanged from a year earlier. Poland regasified 0.13 bcm, up by 30 mcm y/y, and Lithuania sent out 40 mcm, down by 50% y/y.

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