Gazprom’s payment deadline for the majority of its long-term contracts (LTCs) looms at the end of this week. How much more supply could Europe lose? 🧵1/ The cessation of flows from Gazprom to PGNiG 🇵🇱 and Bulgaargaz 🇧🇬 in late April, over non-compliance of the new Euros-Roubles payment mechanism, demonstrated remaining buyers could not sit idly if they want to continue receiving Russian gas. 2/

So this thread is doing the rounds and I think it’s worth putting some extra context in here. The structure of wholesale market in the UK means you get certain export/import trends depending on a number of market dynamics. 1/

https://twitter.com/_richardblack/status/1486721893277134849

First, a large amount of British gas supply is domestic but it’s a not enough to meet demand on its own. Therefore we import gas via pipes and on board LNG tankers.
2/

On New Year’s Day, the price of Within-day gas at the GB market (NBP) dropped below zero. An extremely rare event made rarer by the fact that prices were at all-time highs weeks prior.

So how did the market get negative prices in the middle of its largest ever price spike?
1/ As an aside: It’s not uncommon to see negative prices in power markets but with gas – because we can effectively store it – it extremely unlikely that we get to a point where suppliers are prepared to pay others to accept volumes.
2/