Core Viewpoint - The National Energy Administration emphasizes the importance of strengthening natural gas reserves and improving the market mechanism for gas storage and peak shaving [1] Group 1: Policy and Regulation - The new management measures specify that gas supply companies, the National Pipeline Group, and urban gas companies must maintain a 5% emergency gas storage capacity [1] - Local governments are required to ensure a 5-day emergency gas storage capability [1] Group 2: Infrastructure and Market Mechanism - The management measures promote a collaborative approach to infrastructure development through "large storage facilities, centralized layout, cooperative construction, and leasing or purchasing" [1] - The aim is to prevent the fragmentation of storage responsibilities and to strictly control the proliferation of small and scattered gas storage facilities [1]

Report Key Points 1. Report Industry Investment Rating - No information provided 2. Core Viewpoints - In May 2025, the daily average of natural gas exported from the US to Mexico via pipeline reached 7.5 billion cubic feet, a record high for a single month. This growth is mainly due to the continuous increase in Mexico's demand for natural gas, especially in the power industry [2][5]. - In 2024, the daily average of pipeline natural gas exports from the US to Mexico was 6.4 billion cubic feet, a 25% increase from 2019, reaching the highest level since records began in 1975 [2][5]. - Due to the upcoming 2026 FIFA World Cup in the US, Canada, and Mexico, Mexico may see a higher increase in potential tourists compared to the US and Canada, which could lead to a new high in electricity consumption. This trend will indirectly determine the natural gas supply in North America [2]. 3. Summary by Related Catalogs US Exports of Natural Gas to Mexico - In May 2025, the daily average of natural gas exported from the US to Mexico via pipeline reached 7.5 billion cubic feet, a record high for a single month [2][5]. - In 2024, the daily average of pipeline natural gas exports from the US to Mexico was 6.4 billion cubic feet, a 25% increase from 2019, reaching the highest level since records began in 1975 [2][5]. - From 2019 - 2024, Mexico's total natural gas consumption increased from 7.7 billion to 8.6 billion cubic feet per day, with the growth mainly concentrated in the power industry [5]. - In 2024, the total transmission capacity of the four core corridors for US natural gas exports to Mexico was about 14.8 billion cubic feet per day, with an actual utilization rate of about 43%. Factors restricting export growth include limitations in Mexico's pipeline infrastructure and insufficient natural gas storage capacity [5]. - In 2024, the exports through the West Texas and South Texas pipelines accounted for 91% of the total US natural gas exports to Mexico. The West Texas exports increased significantly from 0.6 billion cubic feet per day in 2019 to 1.8 billion cubic feet per day in 2024, thanks to the successive commissioning of connecting pipelines in central - western Mexico in recent years [6]. Mexican Natural Gas Pipeline Network - To meet potential demand growth, Mexico plans to expand its domestic pipeline network. The "South Texas - Tuxpan" pipeline can transport imported natural gas to end - users such as LNG receiving stations and power plants. It is also connected to the "Southeast Gateway" submarine pipeline completed in 2025, which supplies gas to new power plants in the Yucatan Peninsula [11]. - In 2022, parts of the Tula - Reyes and Tuxpan - Tula pipeline sections were partially activated and are expected to operate at full capacity in 2025. In the same year, the "Mayakan Energy" pipeline will improve the natural gas infrastructure in the Yucatan Peninsula, and the "North Centauro" pipeline started construction in 2025, which will provide incremental gas transmission capacity for the northwestern combined - cycle power plants [11]. - In August 2024, Mexico achieved its first LNG export through the "Altamira Fast LNG1" floating liquefied natural gas unit. Currently, two other export projects, "Altamira Fast LNG2" and "Costa Azul Energy", are under construction, with a total daily production capacity of 0.6 billion cubic feet, and their gas sources rely on US - imported natural gas. The expansion projects of the "South Texas - Tuxpan" pipeline and the "Rosarito Pipeline" will provide transportation support for these LNG projects [11].

Core Viewpoint - Ukraine's state oil and gas company requires an additional import of over 4 billion cubic meters of natural gas to ensure a stable heating season this autumn and winter due to ongoing damage from Russian military attacks on gas facilities [1] Group 1: Gas Supply and Demand - The chairman of Ukraine's state oil and gas company, Sergey Koletskiy, stated that the company needs to import over 4 billion cubic meters of natural gas this season [1] - The ongoing Russian military attacks have resulted in damage to gas production facilities, leading to a reduction in domestic production capacity [1] Group 2: Financial Requirements - To cover the additional gas imports, Ukraine requires extra financing of $1.9 billion [1] - With government support, the state oil and gas company has already raised most of the necessary funds [1] Group 3: Storage and Preparedness - Ukraine has achieved its goal of storing 13.2 billion cubic meters of winter gas ahead of the heating season [1] - However, due to continuous airstrikes on gas production facilities, additional imports are necessary to compensate for the loss in domestic production [1]

Group 1 - The European Union has reached an agreement on a new round of sanctions against Russia, which includes limiting financing channels for Russian banks and banning the use of the "Nord Stream" gas pipeline connecting Russia and Germany [1] - This is described as one of the strongest measures against Russia to date, aimed at further reducing the Kremlin's budget and targeting an additional 105 shadow fleet vessels and their supporters [1] - The G7's price cap on Russian oil exports will be lowered from $60 per barrel to $47.6 per barrel, which is 15% lower than the average market price of Russian crude oil [1] Group 2 - A key element of the EU's 18th round of sanctions is a new dynamic oil price cap mechanism, which will be reviewed every six months to ensure that the price for Russian oil exports to third countries is 15% lower than the average market price [2] - The full impact of this price cap may be limited unless supported by all G7 partners, particularly the United States, as negotiations continue [2] - The latest sanctions took weeks to finalize due to opposition from Slovakia, which sought more time to phase out Russian gas contracts, but agreed to sign the proposal after receiving sufficient guarantees from the European Commission [2] - The EU Council voted to extend the current requirements for member states to maintain sufficient gas reserves before winter for an additional two years, aiming to mitigate risks from gas price volatility due to the Russia-Ukraine conflict [2]

Core Insights - Traders have significantly increased bookings for natural gas storage facilities in Germany, contrasting sharply with earlier this year when storage levels were at a three-year low and replenishing gas was unprofitable [1] - As of this week, over 70% of the available capacity in Germany's underground gas storage has been booked, aligning with the country's pre-winter storage goals [1] - The recent drop in natural gas prices has improved the profitability of gas storage, with traders injecting nearly 10 terawatt-hours of gas into storage facilities last week, marking the largest weekly increase since 2022 [1] Industry Overview - The increase in natural gas storage is seen as a positive development, with traders expressing reduced risk regarding Germany's gas storage actions, and many believing that storage targets for Germany and the EU are likely to be met ahead of the November 1 deadline [1][2] - BloombergNEF estimates that if Germany continues at the current storage rate, gas storage levels could reach 83% by November 1, while Energy Aspects Ltd. forecasts levels between 80% and 85% [4] - The current storage level is at 55%, with booked capacity yet to be fully utilized, indicating potential for further increases [4] Market Dynamics - A key factor influencing the market is the widening discount of summer natural gas prices relative to winter contracts, making summer storage more attractive for traders [4] - As of last week, the benchmark natural gas futures price for August delivery in Europe was approximately €2.5 lower than the February 2026 contract, marking the largest price difference of the year [4] - Despite the easing of storage concerns, traders remain vigilant regarding risks from summer heatwaves and maintenance work in major supply countries like Norway [7] Regulatory Environment - Although there are indications that government intervention is unlikely, EWE AG has urged the German government to remain open to intervention, citing the real risk of insufficient inventory replenishment [7]

Core Insights - Germany's largest gas storage facility remains empty despite being five weeks into the gas storage season, managed by SEFE, a company nationalized in 2022 that was previously part of Gazprom [2][3] - Current gas injection rates have reached 475 million cubic meters per day, the highest in two and a half years, with total gas volume in storage increasing by 1.27 billion cubic meters over five weeks [2][3] Group 1 - The current gas storage level in Germany is significantly lower than last year, at only 8.12 billion cubic meters, which is nearly half of the previous year's levels [3] - The "Reiden" storage facility, which has a capacity of over 4 billion cubic meters, has not received any gas injection for five weeks, marking a historic low [3] - SEFE, as a state-owned entity, is facing challenges due to high market prices and the lack of cheaper Russian pipeline gas, impacting its ability to fill storage [4] Group 2 - EU regulations require gas storage levels to be at least 90% by November 1, with Germany implementing a more lenient requirement of 70% [4] - Governments, including Germany's, are under pressure to secure additional billions of cubic meters of gas, with potential price increases if new gas projects in the US, Africa, and Canada do not meet demand [4] - SEFE announced a capacity auction for the "Reiden" storage facility on May 7, adjusting to new filling level requirements that allow for greater flexibility [5]