OREANDA-NEWS. Lower Russian gas exports this winter — with state-controlled Gazprom not meeting some customers' nominations until 6 March — and brisk reverse flows to Ukraine curbed European supply this winter by over 20bn m? year on year.

Aggregate Russian flows to western Europe — through Nord Stream, at Mallnow, and the Ukraine-Slovakia border — dropped to 193mn m?/d on 1 October-5 March from 306mn m?/d a year earlier. This resulted in cumulative receipts of 30.2bn m? over the period, down from 47.7bn m? a year earlier.

The decrease in Russian deliveries was largely driven by flows below nominations, although there was some incentive for buyers to cut their receipts from Gazprom in the first quarter. Russian exports dropped sharply in the fourth quarter despite oil-indexed prices being lower in the second half of 2014 than earlier in the year encouraging buyers to load their Russian take to July-December.

Germany's Russian receipts were strong in the fourth quarter of 2014, as buyers drew heavily on supply through Nord Stream. But importers receiving gas through other routes had limited flexibility to increase their call on Russian supply because of flows below nominations. Yamal-Europe was at close to full capacity, while flows at the Ukraine-Slovakia border were in a tight range at 48.1mn m?/d, leaving little scope to boost imports.

Gazprom registered a strong decrease in sales to Europe and Turkey — excluding the Baltics — which fell to 32.3bn m? in the fourth quarter from 43bn m? a year earlier. Sales to western Europe dropped to 26.4bn m? from 33.8bn m?, while the firm's sales in central Europe dropped to 5.91bn m? from 9.26bn m?.

The October-December receipts of most countries — including France, Italy, Austria, the Czech Republic and Poland — were the lowest for any quarter since the start of 2013.

European imports dropped further in the first quarter as Nord Stream flows fell. This was partly driven by some buyers minimising their Russian receipts in January-March, when crude-linked prices are expected to be considerably higher than later in the year. But the sharp increase in Nord Stream flows on 6 March, when Gazprom started meeting nominations, also suggested that deliveries through the pipeline had been restricted to below customers' orders. If aggregate Russian deliveries to western Europe throughout the first quarter had been in line with volumes on 6-10 March — when nominations were met — they would have been just 20mn m?/d lower than a year earlier instead of down by 125mn m?/d.

Italian supply appeared to be curbed the most by Russian flows below nominations, with much of the gas typically transiting Ukraine. Italian receipts through Tag — consisting mostly of Russian gas — slipped to 9.52bn m? on 1 October-5 March compared with initial nominations of 13.7bn m?. And when day-ahead Tag capacity bookings to import spot gas from Austria are excluded the shortfall was almost 4.2bn m?.

Other buyers — including those in Slovakia, the Czech Republic, Poland, Austria — also said that their receipts were below nominations.

While no individual country data are available yet for this year, Gazprom's aggregate sales had fallen to about 10.5bn m?/month in January-February from about 14.2bn m?/month in the first quarter of 2014.

Most countries Russian receipts appear to have remained low until 6 March, although deliveries to individual countries downstream of Nord Stream, Mallnow and the Ukraine-Slovakia border are complicated by flows of spot gas.

Dutch receipts from the Gascade system at Oude Statenzijl slipped to 5.49mn m?/d on 1 October-5 March from 14mn m?/d a year earlier. And French imports at Obergailbach decreased to 15.5mn m?/d from 26.2mn m?/d.

And while German gross receipts appeared to remain strong, at least until mid-January, when Nord Stream volumes dropped, net imports slowed sharply because of strong exports. German exports in December reached the highest level since at least 1998. German deliveries east stayed quick in January-February to help supplement reverse flows on to Ukraine and offset lower Czech, Austria, Slovak and Italian receipts from Russia.

German imports from Russia — excluding gas delivered on to Austria at Oberkappel, from Gascade into the Netherlands, to France at Oberkappel and the Czech Republic through Opal and at Olbernhau — slipped to 51.5mn m?/d on 1 October-5 March from 91.5mn m?/d a year earlier. This resulted in a 6.24bn m? drop in German supply, while France's Obergailbach receipts were 1.66bn m? lower and the Netherlands' Gascade imports dropped by 1.32bn m?.

Supply was also tightened by brisk reverse flows to Ukraine, in addition to the 17.5bn m? drop in western Europe's gross Russian receipts. Slovak reverse flows to Ukraine totalled 4.89bn m? on 1 October-5 March and appeared set to remain not far short of the pipeline's 40mn m?/d capacity. Hungary and Poland have also delivered to Ukraine, but the volumes were considerably smaller.