Russia: ‘Gas war’ worsens with Gazprom cuts in Eastern Europe | International

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The gas war between the Kremlin and Europe is expanding on several fronts, while bombs continue to destroy Ukraine on the 79th day of the Russian offensive. On the one hand, kyiv accuses Moscow of having forced a reduction in the transit of gas to the community bloc through its territory. On the other hand, the state monopoly Gazprom has sealed the valves of the gas pipeline that fed Germany through Poland. Yamal-Europe and Nord Stream 2, two major projects from the time when Russia was Europe’s gas reserve, are now just another element of the landscape. And in parallel, the Kremlin denies that it is going to cut off gas to Finland for joining NATO while sending an ultimatum to Moldova, also dependent on Russian gas, to pay the debts it forgave when it had a pro-Russian government.

The European Union plans to cut its Russian gas imports by two-thirds by the end of the year, but the Kremlin has begun to hamper a transition that will not be smooth. The Operator of the Gas Transmission System of Ukraine (GTSOU, for its official acronym in English) denounces that Gazprom does not want to supply through its territory the volumes of gas contracted with Europe. The Soyuz gas pipeline is fed through several connections, but two are key: the Sojranivka station, through which almost a third of the gas passed and which Ukraine closed on May 11 “due to force majeure”; and Sudzha, to which all the gas could be redirected, according to kyiv.

“Sudzha’s technical capacity is 244 million cubic meters of gas per day, more than enough to continue supplying the contracted volumes,” says GTSOU. Until now, about two thirds of the gas that transits Ukraine passed through this station. According to Gazprom data, it supplied 50.6 and 61.9 million cubic meters per day on May 12 and 13, respectively. That is, barely a quarter of the total theoretical capacity of Sudzha.

These figures are not negligible. According to the International Energy Agency, the European Union imported 380 million cubic meters of Russian gas a day through pipelines. That is, 45% of the total in 2021.

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“Our meters registered unauthorized gas intakes in the channeling of the Soyuz gas pipeline through the occupied territories,” GTSOU sources explained to EL PAÍS. That is why the operator, “incapable of maintaining the agreed traffic volumes”, demanded that Gazprom divert the gas to the stations controlled by kyiv. A day after kyiv closed traffic through Sojranivka, Gazprom itself stopped pumping gas there.

Gazprom spokesman Sergei Kuprianov earlier stated that it is “technically impossible” to transfer that gas quota to Sudzha, which is still under Ukrainian control. However, GTSOU denounces that without altering a single comma of the current contract, this route has contracted a maximum capacity of up to 150 million cubic meters per day, “so a space already reserved for the supply to Europe is being wasted”.

Also, current traffic volumes pale in comparison to the capacity that was projected when the pipeline was built before the breakdown of Ukraine-Russia relations. Moscow and kyiv signed a new five-year contract in 2019 by which Gazprom significantly reduced its pumping through that country. Even so, in 2020, 120 million cubic meters per day passed through Sudzha, more than double that of recent days.

On the other hand, GTSOU has a precedent in its favor that year. In October 2020, transit from Sojranivka to Sudzha was transferred for repair works. This second station assumed a volume of 165 million cubic meters of gas, almost triple the figures handled now.

Gas, a pressure weapon

The gas war it has many battlefields. The Kremlin hastened this Friday to deny that it is going to cut supplies to Finland after its prime minister and her president supported the Nordic country’s accession to NATO. “Gazprom supplies gas to several customers in Europe, including NATO member countries,” Vladimir Putin’s spokesman, Dmitri Peskov, recalled following a publication in the Finnish media Iltalehti this Thursday in which several deputies warned that their nation imports 89% of gas from Russia and could run out of supplies “tomorrow”.

Another front is the pressure that Moldova has suffered since its turn towards the European Union. The president of the Eastern country, Maia Sandu, denounced this Wednesday that the Kremlin demands that Chisinau pay its late payment interest now and not when there were leaders in the Kremlin’s orbit. “These debts have been accumulating since 1994. They did not demand their compensation during all this time, and now they ask us, and at a time when fuel prices have risen so much. The political approach is evident,” lamented Sandu.

Russia and Moldova agreed in October 2021 that the gas supply to that country would be extended for five more years in exchange for repaying its debt. Gazprom then pressed with temporary supply cuts, and Chisinau agreed to audit its obligations before May 1. However, he has not been able to do it on time and has asked to postpone it. The Moldovan government alleges that due to the conflict in Ukraine and the sanctions on Gazprom it has been difficult to find companies to do the work. The Russian state gas company estimates that the principal of the debt is 417 million euros, although with interest it raises it to 683 million.

The Russian president’s spokesman also addressed this issue. “There is no political background here. If goods are delivered, they must be paid for. There may be some reasonable facility, but the debt cannot grow constantly, this does not fit into any economic concept,” Peskov warned, although Moldova has paid its current bills, including the gas supplied in April.

Other cuts to Europe

The European Commission has urged member countries to greatly reduce their purchases of oil and gas from Russia, while the Kremlin has responded to the sanctions by creating a mechanism that forces importers to open an account with Russia’s banking subsidiary. Gazprom so that its payments in euros or dollars are exchanged for rubles on the Moscow Stock Exchange.

European countries have been reluctant to do so and demand that their contracts be kept to the letter. Meanwhile, in Russia confusion is encouraged by ensuring that some companies have already agreed to join this system. This is the case, for example, of the Italian Eni, who later denied it. “The agreed currency is the euro and we will continue to receive invoices in euros. We have not opened an account in rubles,” its financial director, Francesco Gattei, told the Bloomberg agency at the end of April.

Poland and Bulgaria have been the first countries to which Moscow has cut off gas for not paying by refusing to accept this mechanism. To this is added that Gazprom canceled from this Thursday its supply through the Yamal-Europe gas pipeline, which crosses Poland before reaching its final destination, Germany. The gas company immediately complied with the instructions of the Kremlin, which has sanctioned several European companies in response to the punitive measures that the West has imposed on the Russian economy for its attack on Ukraine.

Among the 31 companies sanctioned by Russia are several companies in which Gazprom participated for the management of gas pipelines and gas deposits in Europe. After being removed from them, as was the case of the Polish EuRoPol Gaz, Moscow decided that not one more gas molecule would pass through its infrastructures.

Meanwhile, Europe also launches ultimatums to Moscow. “If Gazprom does not fill our largest deposit, we will take it away and hand it over to other suppliers,” Austrian Chancellor Karl Nehammer stressed Thursday in an interview with the newspaper. Kronen Zeitung. Germany, for its part, nationalized the German subsidiary of Gazprom in April. After many years in which Berlin defended that the Nord Stream 2 gas pipeline was a bridge to peace with Russia, its spokesperson for the Economy, Annika Einhorn, affirmed this Thursday that the project, completed in January, “is definitely dead”.

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