MOSCOW, September 2. /TASS/. According to data from Gas Infrastructure Europe (GIE), gas injection into European underground storage facilities (UGS) was over a third lower in August than the previous year, becoming one of the lowest in recent years. However, by the end of the month, total accumulated gas reserves in the EU had reached a historical high for August - almost 93%. At the same time, due to storage occupancy and low pricing, LNG deliveries from terminals into Europe's gas transportation system declined 11% last month compared to July.
In August, European UGS facilities replenished by about 9 bln cubic meters, 31% less than in the previous year. Only about 850 mln cubic meters of gas were extracted from storage facilities, which was 0.5% less than the previous year. However, by the end of the month, Germany and a number of other EU nations had temporarily used gas from their UGS plants due to a modest drop in temperatures and a low share of wind generation in the region.
As of August 31, gas reserves in Europe's storage facilities stood at 92.81%, 11.97 p.p. higher than the five-year average for this date. They now hold more than 102 bln cubic meters of gas. By the start of the heating season in mid-August, European countries had filled 90% of their underground storage facilities with gas. Previously, the European Commission expected such figures to be reaches only by November.
If current injection rates are sustained, Europe could hit the next critical level of 95% as early as the second half of September. On October 28, 2019, the absolute highest occupancy of EU UGS facilities was 97.86%. With favorable conditions for the European Union, this record could be broken this year in the second half of October.
The International Energy Agency (IEA) has previously stated that Europe may almost completely fill its gas storage facilities by mid-September, but even such high stocks might lead to market instability in winter in the event of a harsh winter and a complete halt in Russian gas deliveries. The IEA also predicted that by the end of the upcoming heating season, EU underground storage facilities would have fallen below the key 20% level. The mild winter weather aided in getting through Europe's last heating season.
In August, gas prices in Europe soared by 38%. Gas futures traded at around $290 per 1,000 cubic meters on July 31, 2023, and the price would reach $400 at the end of the trading session on August 31, 2023. At the same time, the average August price rose by 18% to almost $396 per 1,000 cubic meters.
LNG deliveries to Europe
LNG deliveries from terminals to Europe's gas transmission system slowed dramatically in August, decreasing 11% from July and 3% from the previous year to 9.8 bln cubic meters. This figure, however, was only the second in history for this month. The previous peak occurred in August 2022. In total, LNG deliveries from terminals into the European gas transmission system amount to approximately 88.65 bln cubic meters in January-August 2023, a 5% increase over the same period last year.
According to figures from the European Network of Transmission System Operators for Gas (ENTSOG) as of August 30, LNG will account for 40% of Europe's gas supply in 2023. Supplies from the North Sea (mostly Norwegian gas) came in second with a 30% share, and supplies from North Africa came in third with 11%.
The East's share of gas supplies (Russian gas, Ukrainian gas supplies, and European businesses removing their gas from Ukraine's underground storage facilities) decreased to 8.57%. However, this is more than the UK supplies at 6.78%.