Getting full: Gazprom’s domestic gas storages are now 81% full -standing around 20% above their 5y average.
This means that there is less than 14 bcm of storage space left to be filled between now and the beginning of November, when Russian storage needs to be filled to full capacity at 72 bcm (current levels are at 58 bcm).
If last year’s production levels would be sustained, Russian storage would be full by mid-August leading to widespread shut-ins in September, when around one-third of Russian production could be lost.
To avoid the storage crunch and shut-ins of fields, Russia is most likely to pursue a more gradual reduction of production: output was already down by 16% yoy in June and is likely to be down by over 20% yoy through July-October.
Gazprom showed that its own production slumped by 37% yoy in H1 July and this trend should intensify in the coming months…
The question whether such reductions can be maintained without substantial damages to the gas fields, especially the older ones in the Nadym-Pur-Taz region.
What is your view? will Russia face a storage crunch? how will the Russian upstream scope with it?
Source: Greg Molnar (LinkedIn)