GASSCO: QUANTUM OF SOLACE
REUTERS. Norway could increase gas supplies to Europe to make up for the amount lost if Russia cuts off flows through Ukraine, but it could provide that help only for a day or two.
Norwegian pipeline operator Gassco told Reuters on Wednesday it could provide up to 130 million cubic metres (mcm) a day of extra gas for a short time, which is slightly more than Russia currently pumps to Europe via pipelines that pass through Ukraine.
"The (Norwegian gas) production system is more or less tailor-made for the markets it serves. There is some flexibility, but there are some very strong limitations," said Brian Bjordal, head of Gassco.
"It (the extra capacity) would be in the 120 to 130 mcm per day range," he said, but added that Gassco could keep up these flows for only a day or two.
Tensions between Kiev and Moscow are high since Russia seized control of the Crimea region earlier this month. Russia's Gazprom also has threatened to cut supplies to Ukraine after Kiev failed to pay its latest bill to Moscow for its own gas.
Russia provides a third of Europe's gas needs, and a third of its gas exports to the European Union pass through Ukraine. The rest goes through other routes such as the Nord Stream pipeline from Russia through the Baltic Sea into Germany.
Norway, Europe's second-biggest gas supplier, pumps most of its exports through pipelines to Britain, Germany, the Netherlands, Belgium and France and is the biggest supplier in northwest Europe.
An increase in Norwegian exports would not directly benefit central and southeastern Europe, where Russian supplies dominate, but it could free up gas to be exported from Germany, which has large storage capacity, to the East.
Slovakia, which borders Ukraine and would be hit first by a Russian cut, is already ramping up gas imports from Germany through the Czech Republic to preserve stockpiles as a buffer against potential disruption to Russian supplies.
EU COULD DEAL WITH CUT
Analysts said a short-term supply disruption from Russia to Ukraine is likely after Kiev failed to pay its latest bill, but they also said the European Union would be able to deal with such a disruption.
"Gazprom disrupting gas to Ukraine for non-payment of its gas bills seems an almost inevitable occurrence," Energy Aspects said in a research note on Wednesday.
But healthy gas stocks would help Europe deal with a cut.
Following an unusually mild winter and a warm start to spring, regional gas stocks are up almost 40 percent, or 10 billion cubic metres, from the level a year ago, when a long winter had almost depleted stocks.
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GAZPROM - The parties discussed relevant issues related to bilateral cooperation, including the Baltic LNG project. Emphasis was placed on the priority measures aimed at developing a joint design concept (pre-FEED).
BHGE - U.S. Rig Count is up 11 rigs from last week to 1,063, with oil rigs up 8 to 869, gas rigs up 4 to 193, and miscellaneous rigs down 1 to 1. Canada Rig Count is up 13 rigs from last week to 195, with oil rigs up 8 to 127 and gas rigs up 5 to 68.
REUTERS - Brent crude futures had risen $1.02 cents, or 1.3 percent, to $81.28 a barrel by 0637 GMT. The contract dropped 3.4 percent on Thursday following sharp falls in equity markets and indications that supply concerns have been overblown. U.S. West Texas Intermediate (WTI) crude futures were up 80 cents, or 1.1 percent, at $71.77 a barrel, after a 3 percent fall in the previous session. WTI is on track for a 3.5 percent drop this week.
EIA - Brent crude oil spot prices averaged $79 per barrel (b) in September, up $6/b from August. EIA expects Brent spot prices will average $74/b in 2018 and $75/b in 2019. EIA expects West Texas Intermediate (WTI) crude oil prices will average about $6/b lower than Brent prices in 2018 and in 2019.