Natural gas prices in Europe exploded on Tuesday, December 21, 2021, after a major pipeline that brings Russian gas to Europe slowed output over the past couple of days and completely stopped delivering on Tuesday. This combined with record-high prices of electricity after France closed 4 of its largest nuclear reactors last week, low wind energy output, and cold weather to further deteriorate Europe's energy stability ahead of very cold Christmas and New Year.
On Saturday, December 18, gas flow at the Mallnow metering point on the German-Polish border sharply dropped from around 13 500 000 kWh/h to 2 250 000 kWh/h and to 1 800 000 kWh/h on December 19. The flow further dropped to 1 634 206 on December 20 until it completely stopped early December 21.1
The westward flow was still 0 as of 08:30 UTC on December 22.
As a result, the front-month wholesale Dutch gas price (European benchmark) rose to all-time high of 180.27 EUR per MWh on December 21. On July 5, 2021, it was 37.95 EUR per MWh and on October 5 116.8 EUR per MWh.
To put these prices in perspective, take a look at numerical and percentage data for 2021 (first two graphs) and all-time data (graphs 3 and 4).
"Europe has very little storage buffer this winter and it's balance is therefore a lot more dependent on imports than in previous years," James Waddell, head of European gas at Energy Aspects, said.2
"Additionally, Gazprom has traditionally shipped around 20% of its supply to Europe through Poland, but these flows have been inconsistent this year and driving up uncertainty about how much gas Europe will actually receive from Russia."
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