Europe faces gas supply disruptions after Russia sanctions | Oil & Gas News

Moscow’s measures and Ukraine’s halting of key supply routes to Europe have caused prices to soar on the continent.

Europe is under growing pressure to secure alternative gas supplies after Moscow imposed sanctions on the European subsidiary of Russian state-owned energy giant Gazprom and Ukraine shutters A major natural gas transportation route, pushing up prices.

Dutch gas prices at the European benchmark TTF hub were up about 20 percent on Thursday morning.

After Russia introduced the sanctions late on Wednesday, they mainly targeted Gazprom’s European subsidiaries, including Gazprom Germania, an energy trading, storage and transmission business that Germany put under escrow last month. to ensure supply.

Moscow is also targeting EuRoPol Gaz, owner of the Polish portion of the Yamal-Europe pipeline that transports Russian gas to Europe. The pipeline is jointly owned by Gazprom.

“A ban on transactions and payments to sanctioned entities has been implemented,” Gazprom said in a statement. “For Gazprom, this means a ban on the use of gas pipelines owned by EuRoPol GAZ to transport Russian gas. to Poland.”

Kremlin spokesman Dmitry Peskov said there was no relationship with the affected companies, nor could they be involved in supplying Russian gas.

Entities on the list of affected companies on the Russian government’s website are mainly located in countries that have imposed sanctions on Russia for its invasion of Ukraine, most of which are members of the European Union. Last year, EU countries received about 155 billion cubic meters of natural gas from Russia.

Germany, Russia’s biggest customer in Europe, said some of Gazprom Germania’s subsidiaries did not receive gas because of the sanctions, but were looking for alternatives.

“Gazprom and its subsidiaries are affected,” Habeck told the lower house of the Bundestag. “This means that some subsidiaries are no longer getting gas from Russia. But the market is offering alternatives.”

Ukraine closes major shipping routes

Russia’s sanctions came a day after Kyiv shut down the main gas transport route to Europe, accusing the Russian occupying forces of intervening, disrupting exports through Ukraine for the first time since Moscow started its exports to Ukraine. Invasion in late February.

Ukraine’s closed transfer station typically handles about 8 percent of Russian gas going to Europe, and Kyiv has proposed that the flow could be redirected to another transfer station, Sudzha.

Flows through Sudzha had fallen to 53 million cubic meters (mcm) per day on Thursday morning, from about 70 mcm the previous day, data from the Ukrainian gas transmission operator showed.

However, the European Commission said the shutdown in Ukraine would not immediately cause gas supply problems.

Meanwhile, EU gas companies remain baffled by a payments scheme enacted by Moscow in March that the European Commission said would violate EU sanctions.

Russia’s request Most European buyers refuse to pay future gas bills in rubles because the details of the process require opening an account with Gazprombank.

That has raised concerns about potential supply disruptions if buyers refuse to follow the guidelines to avoid violating sanctions.

The concerns come against the backdrop of a surge in wholesale gas prices in Europe over the past year, which has added to the burden on households and businesses as they seek to recover from the economic devastation caused by the COVID-19 pandemic.

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