BAKU, Azerbaijan, May 23. Finland is expected to be able to ease through the gas cut-off, as Russian gas imports only make up 5 percent of the country’s total energy needs, despite most of its gas coming from Russia, Trend quoted Lu Ming Pang, Rystad Energy analyst as saying.
“Finland had already been prepared for a suspension of Russian gas imports, by diversifying its gas supply through the use of the BalticConnector, which is a Finnish-Estonian pipeline that grants Finland access to the Baltic region’s existing pipelines and LNG import terminals. Therefore, given the relatively small impact to Finland and the greater market, the TTF actually ended lower at 86.50EUR/MWh at the end of Friday, as compared to 87.58 EUR/MWh at the time of open,” he said.
Lu Ming Pang noted that the EU had announced last week that countries will not be violating sanctions if they purchase Russian gas, provided that the transaction is completed in EUR or USD, with the Russian Gazprombank performing the conversion to rubles.
“Gazprom is not likely to cut off gas supplies to other European countries considering that the transactions will ultimately still be completed in rubles, except on the technicality that EU countries are not directly paying in rubles themselves. Whether or not this payment mechanism will continue to be viable in the long-run remains to be seen. Finland is understood to have rejected payments despite this mechanism being made available to them. Norwegian gas pipeline flows into the United Kingdom are expected to be slightly lower this week due to outages in Norwegian facilities, specifically through the Troll field. Gas export pipelines to neighbouring EU countries are already at maximum capacity, resulting in a glut of natural gas supply within those hubs,” the analyst noted.
Lu Ming Pang went on to add that while demand has not returned in full swing, there has been increased interest in the spot market, resulting in Asia-delivered LNG now pricing higher than NW-EU delivered prices for now.
“Given that most vessels on the spot market have been plying the Atlantic route to Europe which is also attracting the bulk of US cargoes, there is a dwindling supply of available vessels due to the increased number of floating storages in Northwest Europe. Vessel supply in the Pacific has consequently been affected, causing Pacific charter rates to increase as well,” the analyst explained.
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