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UK GAS-Prices fall on news of Nord Stream 2 gas volumes

British and European gas prices fell on Thursday morning on news that the Nord Stream 2 pipeline will deliver 5.6 billion cubic metres of Russian natural gas this year.

UK gas for immediate delivery was TRGBNBPWKD fell by 7.50 pence to 109.75 pence per therm by 0942 GMT, while day-ahead gas TRGBNBPD1 was 4.30 pence lower at 106.75 p/therm.

The UK September contract TRGBNBPMU1 fell by 5.00 pence to 106.00 p/therm.

At the Dutch TTF hub, the September price TRNLTTFMc1 was 2.05 euro lower at 42.80 euros per megawatt hour, and all the curve fell steeply.

Gazprom has said Nord Stream 2 should be finished in late August and enter service this year. On Thursday it said the pipeline would deliver 5.6 billion cubic metres of Russian gas this year.

Prices had started to fall on Wednesday afternoon after a data error showed a spike in gas flows to the Nord Stream 2 entry point at Lubmin II in northern Germany.

The startup of Nord Stream 2 is eagerly anticipated by the market, where record high prices have been sustained due to very low storage levels, low LNG supply and Russia holding off booking much additional capacity at auctions.

“Russia was considered to be the only exporter with spare production capacity, but the major unplanned processing facility outage near Novy Urengoy this month, followed by a drop in Gazprom export capacity bookings through September, shows that even here supply is limited,” said James Huckstepp, EMEA Gas Analytics, S&P Global Platts.

Also contributing to the fall in prices on Thursday were higher flows from Norway.

Flows through the Langeled pipeline to Britain were 7 million cubic metres (mcm) higher at 46 mcm, Refinitiv Eikon data showed.

Higher flows from the Oseberg field could be compensating for lower output from the Troll field which is undergoing an outage.

The UK gas system was 13 mcm over-supplied, with demand forecast at 146 mcm and flows at 159 mcm/day, National Grid data showed.

The benchmark Dec-21 EU carbon contract CFI2Zc1 was down by 1.34 euro at 55.79 euros a tonne.

The benchmark Dec-21 British carbon contract UKAFMc1 was 0.69 pounds lower at 48.50 pounds a tonne.
Source: Reuters (Reporting by Nina Chestney)

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