STAVANGER, Norway, Aug 26 (Reuters) – The future of Russian natural gas transit through Ukraine remains a major uncertainty for European natural gas prices as continental Europe heads into winter with its storage tanks full, the chief executive of Tortel Energies (TTEF.PA) told Reuters on Monday.
A transit agreement to transport Russian gas to Europe via Ukraine, which accounted for 15 billion cubic metres of the EU's total gas consumption of 295 billion cubic metres last year, is due to expire at the end of this year.
Ukraine has said it will not extend the agreement, and there are concerns that fighting in Russia's Kursk region, home to the Suzha natural gas hub for Ukraine, could cut off gas supplies sooner than planned.
“One of the main factors is deliveries to Ukraine. Even if the storage is full, we don't know if we can fully cover it if deliveries are interrupted,” Patrick Pouyanne said in an interview on the sidelines of an energy conference in Norway.
European natural gas storage levels were last at 91.2% full, reaching the Nov. 1 target two months early, according to data from Gas Infrastructure Europe.
Pouyanne added that the European gas market would remain subject to volatility as there was not much new supply being added, highlighting delays to new liquefied natural gas (LNG) projects such as Golden Pass in the United States.
“So we're still at a stage where there's a surplus in energy supply,” he added.
This situation is likely to continue until 2027, the CEO said.
The benchmark front-month contract at the Dutch TTF hub was trading at 37.03 euros per megawatt-hour (MWh), according to LSEG data.
Prices rose above 40 euros earlier this month, the highest since December, amid fears that fighting in Kursk could halt deliveries.
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Reporting by Nora Bury in Stavanger; Editing by Gladius Huss
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