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Russian Yamal natural gas flows into Germany halted

May 27/2020

MOSCOW (MRC) -- Russian natural gas flows delivering into Germany via the Yamal pipeline have stopped, just days after a long-standing transportation agreement between Russia and Poland expired, data from receiving German Transmission System Operator Gascade shows, said S&P Global.

The former agreement had previously facilitated direct supply to Poland, the transportation of volumes via Poland, and the construction of the pipeline itself, but finally came to end on May 17 after 26 years, with transportation being supported by substantial spot capacity purchases since the agreement's expiration.

Gascade reported that flows has stopped completely at the beginning of gas day May 26, following a ramp-down during the long weekend preceding it, with metered volumes around 21 million cu m/d on May 23, and just 1.1 million cu m/d May 24-25.

Poland's gas market has now entered a new era of liberalization, with capacity markets now governed the European Union's Capacity Allocation Mechanism Network Code, which permits legacy contracts for reasons of infrastructure improvement and security of supply, but forbids the renewal of such agreements.

Market sources have said they had considered the transport route to be Russian gas giant Gazprom's point of portfolio optimization, although the company was not immediately available for comment.

The cessation of flows through Yamal has also affected flows downstream, with Slovakian TSO reporting entries at the Czech Lanzhot border of just 9 million cu m/d, down from 37 million cu m/d on May 22, and Slovakian exit into Austria at Baumgarten dropping to 91 million cu m/d from 121 million cu m/d in the same timeframe.

As MRC reported previously, in early January, 2020, Gazprom Export and Gazprom Armenia signed an additional agreement to the contract for Russian gas supplies to the Republic of Armenia. In accordance with the agreement, the price of natural gas at the border between Georgia and Armenia will not change starting from January 1, 2020, and will remain at the level of 2019. Gazprom Armenia, a wholly-owned subsidiary of Gazprom, is focused on natural gas supplies to the Armenian market. In addition, the company transports, stores, distributes and sells natural gas, as well as upgrades and expands the gas transmission system and underground gas storage facilities in the Republic of Armenia. The contract between Gazprom Export and Gazprom Armenia for the supplies of up to 2.5 billion cubic meters of Russian gas per year will be in effect until the end of 2020.

Ethylene is the main feedstock for the production of polyethylene (PE).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 557,060 tonnes in the first three month of 2020, up by 7% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments rose because of the increased capacity utilisation at ZapSibNeftekhim. Demand for LDPE subsided.

Author:Anna Larionova
Tags:natural gas, PE, gas pressure pipe, gas processing, Gazprom.
Category:General News
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