Gazprom cuts gas to EU via Belarus by 70%

Russian company Gazprom continues to cut gas supplies to Europe via Belarus, potentially exacerbating tense market conditions.

Exports to the EU via Belarus fell from 112 million cubic meters (mcm) on September 26 to just 30 million cubic meters on Sunday October 3, according to the latest data from Gazprom.

This equates to a 70 percent drop.

Direct deliveries from Russia and via Belarus to neighboring Ukraine have also increased from around 110 million cm to 85 million cm at the same time.

The new figures come after supplies via the Yamal gas pipeline, which connects Russia via Belarus to Poland, halved last week.

Analysts, such as US investment bank Goldman Sachs, said the Yamal cuts could cause gas prices to rise in the winter.

And there was already a global crisis in the gas markets, which saw wholesale prices at the Dutch TTF – the world’s leading hub for trading in gas futures – soar to € 113 per megawatt hour – a 100% price increase in less than a month.

Gazprom executives, such as Deputy Director Vitaly Markelov and Export Director Sergey Komlev, spoke reassuringly.

Markelov told the St. Petersburg International Gas Forum on Tuesday that Gazprom’s gas exports to Europe in 2021 “will continue to remain high,” according to Russian news agency Tass.

“The accusations that Gazprom is not supplying gas to Europe are absurd,” Komlev told reporters.

The Kremlin has said Gazprom is ready to pump more gas if necessary.

And Russian diplomats say Gazprom supplies EU customers in “good faith”.

But at the same time, some have accused Russia of tightening the screws in order to create political as well as market pressure.

Russia recently completed a new gas pipeline to Germany called Nord Stream 2.

He says he could pump an additional 5.6 billion cubic meters (bcm) of gas to the EU this year through Nord Stream 2 if he started immediately, but he wants to operate the pipeline as his private monopoly.

German regulator Bundesnetzagentur said on Tuesday Gazprom could be fined if it starts pumping gas before formally complying with EU laws on “non-discriminatory grid access” for competitors .

And the drop in EU gas supplies from Russia was a form of political blackmail over the approval of Nord Stream 2 for Olha Stefanishyna, Ukrainian Deputy Prime Minister, who recently said in an interview with EUobserver.

A group of 42 multi-party MPs also recently complained that Gazprom was withholding gas.

And EU Energy Commissioner Kadri Simson told Reuters news agency on Tuesday: “We are examining this claim, together with [commission] Executive Vice President [Margrethe] Vestager, who is responsible for the competition rules, because it is, of course, a very serious matter “.

She added that “our initial assessment suggests that Russia is fulfilling its long-term contracts.”

But, speaking during a trip to Estonia and Finland on the same day, European Commission President Ursula von der Leyen also told reporters that weak supplies from Russia was one of the main causes of high prices.

“We are very grateful to Norway for stepping up production, but this does not appear to be the case in Russia,” she said in Finland.

The European Commission is due to announce a new “toolbox” of recommendations on how to deal with soaring gas prices next week.

And European leaders will discuss the creation of a new “strategic gas reserve” at a summit in Slovenia, which was to be devoted to the Western Balkans, Wednesday.

But in the long run, von der Leyen and Simson said the EU should look to renewable energy sources to reduce reliance on volatile fossil fuel suppliers.

“Renewable energies are good. We will be independent,” said von der Leyen in Estonia.

“At the end of the day, the solution is the same, whether it’s price, security of supply or climate: developing local, affordable and affordable renewable energy is the way to go,” Simson told Reuters.

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