Because the gas crisis is getting worse
The gas crisis in Europe could get worse: winter is near, supplies from Russia are limited, and China has asked state-owned companies to increase stocks at any cost. All the details
The energy crisis in Europe, with high gas prices and supply difficulties ahead of winter, is showing signs of worsening: China has ordered its state-owned companies to increase stocks in anticipation of the cold season, while supplies from Russia are limited.
WHAT IS HAPPENING
More specifically, Chinese vice-premier Han Zheng, who is in charge of monitoring the energy sector, told state-owned companies in the sector to ensure sufficient supplies of gas at any cost: China is also experiencing an energy crisis, mainly due to a shortage of coal , which is causing interruptions to industrial activities and rationing of electricity to citizens, especially those who live in the northeastern part of the country.
At the same time, the Russian gas company Gazprom has not booked additional transportation capacity through the Yamal-Europe pipeline, which connects Russia to Germany.
THE SITUATION OF EUROPE
The international energy crisis, Bloomberg writes, is leaving Europe in search of natural gas and coal: stocks of both of these fuels are at low levels because last winter was colder and longer than normal, characteristics that have caused a increased energy demand for heating. There is also a lack of water, without which it is not possible to produce electricity from hydroelectric plants.
The situation will probably get worse: energy demand is picking up, after the drop caused by the pandemic, and winter is now near.
CONSEQUENCES FOR CONSUMERS
Leslie Palti-Guzman, president of US consultancy Gas Vista, told Bloomberg that European consumers will have to contend with high electricity and gas prices for the rest of the winter. In Italy, the government intervened to stop the increase in bills, which in any case will grow by 29.8 per cent (for electricity) and 14.4 per cent (for gas) in the fourth quarter of the year.
In the United States the situation is not as bad as in Europe: the price of gas has increased but not as much as in the Old Continent because the country can count on the domestic (and rather cheap) production of shale gas.
FLOWS FROM RUSSIA
Meanwhile, Russian gas supplies passing through the Mallnow compression station in Germany (outlet point of the Yamal-Europe pipeline) continue to decline. Flows, Bloomberg writes, are about a third lower than at the start of the week. For the month of October, only 35 per cent of the transport capacity to Mallnow has been booked.
GAS PRICES IN THE NETHERLANDS
In the Netherlands, where the TTF trading point, one of the most important in Europe, is located, natural gas prices for the next month have risen by 14.7 percent to € 99.3 per megawatt hour. Compared to last month, gas contracts have more than doubled.
Energy contracts in Germany for next year increased by 13 percent (133 euros per MWh), and those in France by 10.3 percent (135.5 euros per MWh).
FORECASTS
Competition on supplies between Europe and China could drive gas prices further. Those of liquefied natural gas (LNG) for the Asian spot market yesterday reached a record value of 34.47 dollars per million British thermal units. So far the demand for LNG from Asia, which has attracted loads that would otherwise have headed to Europe, has been one of the main factors in the increase in fuel prices in the Old Continent.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/crisi-gas-europa-cina/ on Sat, 02 Oct 2021 06:04:35 +0000.