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NATGAS: New Gas Deals Could Offset Some Ukraine Transit Loss: Morgan Stanley

NATGAS
CommoditiesCEEMEAEnergy BulletsBulletPower BulletsGlobalRegion

Small new gas supply deals negotiated by central and eastern European countries with Azerbaijan and via the TurkStream pipeline could partially offset the current 40mcm/d Ukraine transit supply loss expected at year end, according to Morgan Stanley cited by Bloomberg.

  • The OMV cut “likely reduces the supply of gas sold spot into the European market and tightens European balances further.” OMV’s contract with Gazprom is approximately 15mcm/d and represents around 40% of remaining Russian gas flows to Europe via Ukraine.
  • Slovakia’s SPP has signed a pilot deal for supplies from Azerbaijan which could replace a portion of a 3bcm/year contract with Gazprom. The gas could be transported through the Trans-Balkan pipeline then across Romania and Hungary, or through the TAP pipeline and then via Italy and Austria.
  • “We now assume this deal will send 4mcm/d of gas to Slovakia that will carry on through next year, replacing ~50% of lost Russian flows to the country.”  
  • Southern Gas Corridor capacity constraints will limit flows while TAP may accommodate extra flows to Slovakia following expansion work.
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Small new gas supply deals negotiated by central and eastern European countries with Azerbaijan and via the TurkStream pipeline could partially offset the current 40mcm/d Ukraine transit supply loss expected at year end, according to Morgan Stanley cited by Bloomberg.

  • The OMV cut “likely reduces the supply of gas sold spot into the European market and tightens European balances further.” OMV’s contract with Gazprom is approximately 15mcm/d and represents around 40% of remaining Russian gas flows to Europe via Ukraine.
  • Slovakia’s SPP has signed a pilot deal for supplies from Azerbaijan which could replace a portion of a 3bcm/year contract with Gazprom. The gas could be transported through the Trans-Balkan pipeline then across Romania and Hungary, or through the TAP pipeline and then via Italy and Austria.
  • “We now assume this deal will send 4mcm/d of gas to Slovakia that will carry on through next year, replacing ~50% of lost Russian flows to the country.”  
  • Southern Gas Corridor capacity constraints will limit flows while TAP may accommodate extra flows to Slovakia following expansion work.