Potential Impact of an Interruption in Gas Transit via...

Potential Impact of an Interruption in Gas Transit via Ukraine

Dr. Jack Sharples (Research Fellow)

NATURAL GAS PROGRAMME

Natural Gas Programme,

Oxford Institute for Energy Studies

NOVEMBER 2019

NATURAL GAS PROGRAMMEGAS PIPELINE CAPACITIES AND FLOWS

• Ongoing monitoring of capacities and utilisation rates of pipelines bringing Russian gas to Europe

• Non-Ukrainian routes includes Nord Stream, Yamal-Europe, and Gazprom-owned Belarusian system (Wysokoje to POL)

• Ukrainian system: Drozdovichi (POL), Velké Kapušany (SLK), Beregovo (HUN), and Isaccea & (ROM)

• As Russian exports to Europe have grown since 2017, is the system for bringing that gas to Europe ‘full’?

• Is this justification for NS2 and Turkish Stream?

• Implications of disruption in Ukrainian transit in Q1 2020?

Introduction

NATURAL GAS PROGRAMMENOVEMBER 2019

Border points monitored

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1-Jan 1-Feb 1-Mar 1-Apr 1-May 1-Jun 1-Jul 1-Aug 1-Sep 1-Oct 1-Nov 1-Dec

Total System Utilisation (% of Capacity)

2018 2019


Total system volume and utilisation

• Total flows of 400-550 standard mmcm/d in 2018-19

• Total flows 175.8 bcm in 2018

• 1st Jan-7th Nov 2019 c.150 bcm, exactly same as in 2018

• Total system utilisation 63-93%, lower only for maintenance

• Q1-18 (83%) vs Q1-19 (79%)

• Jan-18 (85%) vs Jan-19 (81%)

• Spare capacity? Not really

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Total System Flows (Standard mmcm/d)

2018 2019

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Yamal-Europe Flows (Standard mmcm/d)

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Nord Stream Flows (Standard mmcm/d)

2018 2019


Utilisation of Nord Stream & Yamal-Europe

• Total flows of c.260 mmcm/d in 2018-19

• 1st Jan-7th Nov 2019 c.76.8 bcm, 1.3 bcm lower than in 2018

• Plus 2.5 bcm via Wysokoje, down from 2.9 bcm in 2018

• Utilisation rate of around 100%, lower only for maintenance…

• … and slight downward flexing on Yamal-Europe in Jun/Aug-19

• Same period: Wysokoje utilisation c.50% of 16 mmcm/d capacity

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Isaccea Flows (Standard mmcm/d)

2018 2019


Utilisation of Drozdovichi & Isaccea

• Total flows YTD: 2018 (3.6 bcm) vs 2019 (3.3 bcm)

• Daily average: 2018 (12 mmcm/d) vs 2019 (10 mmcm/d)

• Utilisation rate: 2018 (86%) vs 2019 (83%)




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Drozdovichi Flows (Standard mmcm/d)

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Beregovo Flows (Standard mmcm/d)

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VK Flows (Standard mmcm/d)

2018 2019


Utilisation of Velké Kapušany & Beregovo






• Utilisation rate: 2018 (58%) vs 2019 (84%) - (Firm Tech Cap down 55 to 48 mmcm/d since 1st Oct 2018)

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Ukrainian Route Flows (Standard mmcm/d)

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Ukrainian Route Utilisation (% of Capacity)

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Utilisation of Ukrainian transit route



• Utilisation rate: 2018 (72%) vs 2019 (72%) – Slight decline in cap

• Ukraine key during NS maintenance

• Isaccea decline due to fall in Russian exports to Turkey

• VK is the major transit point

• Surge at Beregovo for storage

• No spare cap on non-Ukrainian routes

• Gazprom ‘maxing out’ NS and Yamal-Europe, with limited seasonal flex on small-capacity Wysokoje

• In the event of transit interruption via Ukraine, no substantial spare capacity on other routes

• Jan 2019: 220 mmcm/d via Ukraine, of which 40 mmcm/d to Romania, Bulgaria, Greece, and Turkey

• Leaves c. 180 mmcm/d to Central Europe via Ukraine

– Poland, Slovakia, Austria, Italy, Slovenia, Croatia, Hungary, Serbia

• European storage is effectively full, but:

– Cold weather could see stocks used quickly

– Long interruption could lead to stocks being completely drained


Conclusions


In this context, what would be

the impact of a suspension of

Russian gas transit via Ukraine?


Export routes and countries analysed

• This research used the following data:

– Daily storage withdrawal capacity

– Daily average storage withdrawals in Jan-Mar 2017-19

• To calculate ‘spare’ daily storage withdrawal capacity

• To what extent can this ‘spare’ daily storage withdrawal capacity compensate for daily net imports of Russian gas via Ukraine?


Data analysis


Daily Average 'Spare' Storage Withdrawal Capacity minus Daily

Average Net Imports via Ukraine (mmcm/d)

Jan-17 Feb-17 Mar-17 Jan-18 Feb-18 Mar-18 Jan-19 Feb-19 Mar-19

Austria 32.0 39.8 66.1 42.2 30.3 36.7 35.4 55.3 79.1

Bulgaria -11.7 -9.4 -6.5 -8.4 -9.3 -7.3 -9.8 -8.5 -6.0

Croatia -5.0 -1.6 1.6 -1.5 -3.2 -0.9 -3.6 -1.4 1.2

Greece -10.1 -7.8 -3.9 -9.6 -10.1 -9.5 -9.5 -9.1 -6.1

Hungary 22.8 39.2 55.0 40.2 34.5 42.2 30.2 40.4 51.9

Italy 53.0 113.9 201.5 121.3 78.3 136.2 86.0 114.6 162.5

N. Macedonia -1.7 -1.3 -0.4 -1.3 -1.5 -0.8 -1.4 -0.9 -0.4

Poland 20.0 28.0 31.9 24.0 34.2 29.1 28.9 35.7 38.6

Romania -5.6 6.0 20.4 4.5 4.8 10.3 -1.0 6.6 19.5

Serbia -9.5 -8.8 -6.5 -8.8 -9.1 -7.8 -9.2 -10.3 -6.8

Slovakia 27.5 34.0 40.7 28.8 28.6 30.6 19.3 26.5 38.2

Slovenia -9.4 -8.0 -6.3 -4.4 -5.1 -4.6 -4.9 -4.6 -3.9

Regional total 102.3 224.0 393.6 227.0 172.4 254.2 160.4 244.3 367.8

Italy + Slovenia 43.6 105.9 195.2 117.0 73.1 131.6 81.2 110.0 158.6

HUN, SRB, CRO 8.3 28.8 50.2 30.0 22.2 33.5 17.4 28.7 46.4

• How much gas would be left in storage at the end of Q1-2020, if…

– Withdrawals from storage in November-December

– Use of storage to meet seasonal demand in Q1

– Use of storage to compensate for loss of Ukrainian flows

• … were the same as actual storage withdrawals and actual net imports of Russian gas via Ukraine in:

– Winter 2016-17

– Winter 2017-18

– Winter 2018-19


The scenario


Storage on 1

Nov 2019

(mmcm)

Amount left in storage at end of Q1

(mmcm)

No. of days of stocks left at end of Q1

at March withdrawal rate

Q1-17 Q1-18 Q1-19 Q1-17 Q1-18 Q1-19

Austria 8,475 1,077 764 3,586 33 12 180

Bulgaria 581 -598 -541 -524 -63 -52 -58

Croatia 514 -343 -286 -288 -79 -42 -60

Greece - - - - - - -

Hungary 6,362 1,568 1,679 1,639 65 46 60

Italy 18,166 1,001 -339 688 14 -3 6

N. Macedonia - - - - - - -

Poland 3,180 262 550 860 14 25 69

Romania 2,953 346 324 232 40 17 24

Serbia - - - - - - -

Slovakia 3,862 2,054 1,841 1,998 909 149 418

Slovenia - - - - - - -

Regional Total 44,094 5,367 3,990 8,190 32 13 42

Italy + Slovenia 18,166 292 -762 289 4 -6 3

HUN, SRB, CRO 6,876 484 624 568 17 14 18

Scenarios for longevity of storage stocks if storage withdrawals in the

previous November-December are applied to each quarter

• If the winter is mild, most countries have sufficient stocks to last until at least early May

• If the winter is cold, this could be mid-April

• Extra LNG (NW Europe, Italy, Greece) and cross-border flows from NW to Central Europe are likely to ease the situation

• But Bulgaria certainly needs reverse-flow supplies via Turkey and the Trans-Balkan Line

• Storage withdrawals in Nov-Dec 2019 and the weather in Q1-20 will be key factors

• Europe could cope with a disruption in Ukrainian transit during Q1-20, but it will test the ability of the market to react


Results


Thank you

[email protected]

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