On Friday, European spot gas prices went down following a Kremlin’s statement regarding the supply through Belarus which underlined that Gazprom remained a reliable gas exporter.
The Dutch front-month gas contract slipped to EUR75.12/MWh (USD85.97/MWh) from EUR79.40/MWh (USD90.86/MWh) from Friday morning.
The decline followed the statement from Kremlin, saying that the supply threat from Belarus, a close Russian ally, had nothing to do with Russia as Belarus is an independent country.
"This is a statement by the president of Belarus. I want to remind you of President Putin's statement that Russia has always fulfilled its contractual obligations. Belarus is our ally, but it is a sovereign state,” said Kremlin spokesman Dmitry Peskov.
Previously on Thursday, Belarusian President Alexander Lukashenko threatened to shut down the transit of natural gas and goods via Belarus in response to new EU sanctions regarding the country’s political standoff.
Due to the Belarusian statement, European spot gas prices jumped by 2% on Thursday to EUR75.25/MWh (USD86.11/MWh) but towards the end of the day, prices dropped as a sign that the market did not take the warning too seriously.
Analysts at VTB Capital, a unit of Russian state bank VTB, played down the Belarus threat. "We think this threat is unlikely to be carried out, as it would lead to the loss of transit income and commercial fines being levied on Belarus, as well as potentially broader repercussions for Russian-Belarusian relations," they noted.
According to the preliminary data from German network operator Gascade, on Thursday, Russian gas continued flowing via the Yamal-Europe pipeline to Germany, which also runs through Belarus, showing a decline in volume to 6,500,948 kWh from the average of 8 million kWh.
At some point on Wednesday, hourly entry flows at the Mallnow metering point on the Polish border were as high as 15,196,614 kWh. However, the volume of gas transportation into Poland from Germany was at zero.
Meanwhile, the daily flows of Russian gas to the west on the Ukraine-Slovakia border were at 92.1 million m3 or 1 million MWh on Friday, similar to the previous two days.
Gazprom did not reply to an inquiry regarding the volumes via the Yamal-Europe towards Germany which was lower than usual on Friday.
Separately, Gazprom CEO Alexei Miller said that the company was fulfilling its plan at underground European gas storage facilities and would exceed obligations under its transit agreement with Ukraine in 2021.
Analysts from Energy Aspects noted that there is a slim chance that Russian gas deliveries to Europe would exceed expectations, more likely to disappoint, moreover in the winter.
