Russian gas deliveries to Europe via the “Turkish Stream” pipeline are increasing in August. While an average of 49.5 million cubic meters per day was supplied via the European branch of the Black Sea gas pipeline at the beginning of the month, the volume increased to 50.5 million by mid-month, according to ENTSOG. On certain days starting August 13, deliveries even surged above 54 million cubic meters.
August figures already exceed deliveries for the same month last year. The main increase is in Romania, where the country’s only nuclear power plant was shut down on August 13 due to low water levels in the Danube. Despite all efforts by the authorities, the Cernavodă plant ran out of water to cool its reactors.
Russian gas also flows through Romania to Hungary, and according to ENTSO-E, since August 13, the surplus remaining in Romania has risen to 4.7 million cubic meters, while the August average has remained at nearly 3 million cubic meters.
On the one hand, Romania needs more gas for power generation following the shutdown of the nuclear power plant. Transelectrica, the operator of the Romanian power grid, reports that gas-fired generation capacity has increased slightly—by an average of 30 MW. On the other hand, companies in the country are increasing injections into storage facilities. In Romania, underground gas storage facilities are 66% full, which is significantly better than, for example, in Bulgaria, Germany, Belgium, and the Netherlands.
Price may also be a contributing factor. Romanian companies do not import Russian gas directly but purchase it from international traders who maintain long-term contracts with Gazprom. Last week, gas prices in Europe once again exceeded $700 per thousand cubic meters, and today deliveries are trading at $760. Consequently, it has become profitable for traders to increase imports of Russian gas, which is supplied under long-term contracts, with prices pegged to the previous month’s forward quotes. In July, prices were significantly lower—just over $600.
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