Russian Gas Flows to Germany Through Yamal Restart, Sending Prices Lower
LONDON (Reuters) — Gas flows from Russia to Germany via the Yamal pipeline started up again on Thursday afternoon, data from the pipeline's German operator showed, sending European gas prices lower.
Russian gas has not flowed to Germany via the pipeline since Saturday. Instead, supplies were being sent from Germany to Poland in a reversal that has sent benchmark European gas futures up as much as 23% this week from last Friday's closing price.
The switch comes against a backdrop of soaring gas prices in Europe and accusations from some politicians in the region that the Kremlin is not increasing supplies and calming spot prices to pressure Germany and the European Union to approve the Nord Stream 2 pipeline, which will bring gas from Russia directly to Germany.
Moscow has denied this and has said it is meeting its contractual obligations, something confirmed by European companies contacted by Reuters.
Westward Yamal flows resumed round midday local time with 1,929,395 kilowatt hours an hour leaving the pipeline's Mallnow German entry point, rising to 6,398,586 the following hour, data on German operator Gascade's website showed.
British and Dutch gas prices for day-ahead delivery were both down around 5-6% by 1415 GMT, while the European benchmark Dutch front-month contract was down 5% at 72.90 euros/MWh having traded up for most of the morning.
The contract's price was still around 13% higher than last week and traders said they didn't expect a substantial drop in prices until continued higher flows from Russia could be assured.
Russia has said it is concentrating on replenishing domestic stocks before releasing any more gas to Europe. It expects its own replenishment process to finish by Nov. 8.
The country's gas giant Gazprom has not responded to a request for comment.
The level of Yamal flows between Poland and Germany and their direction are managed by Gaz-System in Poland and Gascade in Germany, based on customers' requests.
Gas market analyst Wolfgang Peters of the GasValueChain company said the reverse flows this week pointed to demand from Poland given generally high prices and tight supplies of liquefied natural gas (LNG), adding that industrial customers in Poland could book shipments separately from Polish gas monopoly PGniG.
Earlier on Thursday, entry renominations - or requests to transport gas into Germany - rose from zero to 6,948,767 kilowatt hours/hour until early Friday morning but physical flows initially remained at zero, the data showed.
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