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Tag: Gazprom

  • Putin presents Europe fuel via Nord Stream 2, Germany declines

    Russian President Vladimir Putin on Wednesday supplied to renew fuel provides to Europe via the intact a part of the Nord Stream 2 fuel pipeline.

    “The ball is in the EU’s court. If they want to, then the taps can be turned on and that’s it,” he mentioned in a speech at an vitality discussion board in Moscow.

    Germany, nonetheless, mentioned it will not take Russian fuel by way of the Nord Stream 2 pipeline that has turn out to be a flashpoint within the Ukraine disaster.

    Asked if Berlin would rule out the usage of Nord Stream 2, German authorities spokeswoman Christiane Hoffmann mentioned, “Yes.”

    “Independently of the possible sabotage of the two pipelines, we have seen that Russia is no longer a reliable energy supplier, and that even before the damage to Nord Stream 1 there was no longer any gas flowing,” Hoffmann instructed reporters.

    Massive quantities of fuel had been launched into the Baltic Sea after each hyperlinks of the Nord Stream 1 pipeline and one of many two hyperlinks of the Nord Stream 2 pipeline had been ruptured on September 26.

    Russia had already halted fuel deliveries via the Nord Stream 1 pipeline in early September, citing technical issues. Nord Stream 2 by no means grew to become operational as Germany halted its approval after the Russian invasion of Ukraine.

    Putin mentioned it was potential to restore the pipelines however that Russia and Europe ought to resolve their destiny.

    Nord Stream repairs may take a yr

    The Russian invasion prompted European consumers to begin the method of weaning themselves off Russian oil and fuel and search for different suppliers.

    Speaking on the similar discussion board as Putin, Alexei Miller, head of Russian vitality firm Gazprom, mentioned repairs to the broken Nord Stream pipelines would take at the very least a yr.

    He added there was “no guarantee” that Europe would survive winter primarily based on its present fuel storage capability.

    Germany’s fuel storage amenities are almost 95% full, and officers say the nation is well-placed to get via the winter, although efforts to avoid wasting fuel might be mandatory.

    Putin moots main fuel hub in Turkey

    Ahead of a gathering along with his Turkish counterpart Recep Tayyip Erdogan, Putin proposed the creation of an vitality hub in Turkey.

    “We could move the lost volumes from the Nord Streams along the bottom of the Baltic Sea to the Black Sea region and thus make the main routes for the supply of our fuel, our natural gas to Europe through Turkey, creating the largest gas hub for Europe in Turkey,” he mentioned.

    Russia is the world’s second-largest oil exporter after Saudi Arabia and the highest pure fuel exporter.

  • China to start out paying for Russian gasoline in roubles, yuan

    Russia’s Gazprom mentioned on Tuesday it had signed an settlement to start out switching funds for gasoline provides to China to yuan and roubles as an alternative of {dollars}.

    The shift is a part of a push by Russia to cut back its reliance on the U.S. greenback, euro and different onerous currencies in its banking system and for commerce – a drive that Moscow has accelerated because it was hit with Western sanctions in response to its invasion of Ukraine.

    Russia has been forging nearer financial ties with China and different non-Western nations, particularly as new markets for its important hydrocarbon exports.

    Gazprom CEO Alexei Miller mentioned permitting for funds in Russian roubles and Chinese yuan was “mutually beneficial” for each Gazprom and Beijing’s state-owned China National Petroleum Corporation.

    “It will simplify the calculations, become an excellent example for other companies and give an additional impetus for the development of our economies,” he mentioned.

    Gazprom didn’t present additional particulars on the scheme or say when funds would change from {dollars} into roubles and yuan.

    President Vladimir Putin earlier this yr compelled European clients to open rouble financial institution accounts with Gazprombank and pay in Russian foreign money in the event that they needed to proceed receiving Russian gasoline. Supplies had been lower off to some corporations and nations that refused the phrases of the deal.

    Russia signed a landmark $37.5 billion extension to its deal to produce gasoline to China on the eve of the invasion.
    It began pumping gasoline to China by way of the three,000-km (1,865 mile) Power of Siberia gasoline pipeline in late 2019. Putin hailed the transfer as a “genuinely historical event, not only for the global energy market, but above all for us, for Russia and China.”

  • Russia places sanctions on Gazprom items in Europe and US, half proprietor of pipeline

    Moscow has imposed sanctions on the proprietor of the Polish a part of the Yamal pipeline that carries Russian fuel to Europe, in addition to the previous German unit of the Russian fuel producer Gazprom, whose subsidiaries service Europe’s fuel consumption.

    The entities on an inventory of affected corporations on a Russian authorities web site on Wednesday had been largely based mostly in international locations which have imposed sanctions on Russia in response to its invasion of Ukraine, most of them members of the European Union.

    The implications for fuel provides to Europe, which buys greater than a 3rd of its fuel from Russia, weren’t instantly clear. Eastbound fuel flows continued by way of the Yamal-Europe pipeline from Germany to Poland, knowledge from the Gascade pipeline operator confirmed.

    Energy costs rose on Wednesday because the European Union weighs a doable embargo on Russian crude, whereas buying and selling corporations are set to chop exercise with Russia when tighter EU guidelines on Russian oil gross sales come into impact on May 15.

    Russian President Vladimir Putin decreed on May 3 that no Russian entity can be allowed to make offers with these on the sanctions checklist, and even fulfil its obligations underneath current offers.

    The decree explicitly forbids the export of merchandise and uncooked supplies to folks and entities on the checklist.

    Russia’s Interfax information company stated these comprised Polish pipeline proprietor EuRoPol Gaz, Gazprom Germania, and 29 Gazprom Germania subsidiaries in Switzerland, Hungary, Britain, France, Bulgaria, the Benelux area, the United States, Switzerland, Romania and Singapore.

    Gazprom provides a lot of its fuel to Europe by way of the Yamal-Europe pipeline, and its varied actions throughout and out of doors Europe are important for the European fuel market and its provide to business and households.

    Germania operations, based mostly on Russian fuel manufacturing, cowl your complete fuel worth chain from pipeline transmission to storage and provides to wholesalers and retailers.

    Western Europe’s largest pure fuel storage facility in Rehden, Germany. (Reuters)

    Gazprom gave up possession of the agency final month with out clarification, forcing Germany’s power community regulator to take management of operations there.

    Those operations embrace Germany’s largest fuel storage facility at Rehden in Lower Saxony, with 4 billion cubic metres of capability.

    The German economic system ministry stated it was inspecting the Russian announcement on Gazprom Germania however nonetheless had no particulars. The provide of fuel is presently assured and is being continually checked, the ministry stated.

    “The German government and Federal Network Agency, as trustees of Gazprom Germania, are already in the process of taking the necessary precautions and preparing for various scenarios,” the spokesperson stated in a press release.

    Tugboats get into place on the Russian pipe-laying vessel “Fortuna” within the port of Wismar, Germany. (AP)

    Putin framed his decree as a response to what he solid because the unlawful actions of the United States and its allies meant to deprive “the Russian Federation, citizens of the Russian Federation and Russian legal entities of property rights” or to limit their property rights.

    The United States and its allies have imposed probably the most extreme sanctions in trendy historical past on Russia and Moscow’s enterprise elite, steps that Putin casts as a declaration of financial warfare.

    “The intent is clear – just reciprocating the actions by Western Europe and they get to control the revenue and gas flows,” stated Ramanan Krishnamoorti, chief power officer at University of Houston.

    Putin, 69, repeatedly warned that Moscow would reply in sort, although till final week the Kremlin’s hardest financial response had been to chop off fuel provides to Poland and Bulgaria and demand a brand new cost scheme for European patrons of fuel.

    Gaz-System, the operator of the Polish part of the Yamal-Europe pipeline, couldn’t instantly be reached for remark.

    EuRoPol Gaz, collectively owned by Gazprom and Poland’s largest fuel firm, PGNiG,, and earns transit charges for Russian fuel crossing Poland. PGNiG had no instant remark.

    Wingas, a Gazprom Germania subsidiary and one in all Germany’s largest fuel merchants, stated after the takeover by the German regulator that it might proceed working underneath the modified parameters.

  • Poland, Bulgaria accuse Russia of utilizing pure fuel as ‘blackmail’

    Polish and Bulgarian leaders, on Wednesday, accused Moscow of utilizing pure fuel to blackmail their international locations after Russia’s state-controlled vitality firm stopped supplying them with fuel. European Union leaders echoed these feedback and had been holding an emergency assembly on the Russian transfer.

    The fuel cutoff to Poland and Bulgaria got here after Russian President Vladimir Putin mentioned that “unfriendly” international locations would want to start out paying for fuel in rubles, Russia’s forex, which Bulgaria and Poland refused to do.

    Russian vitality big Gazprom mentioned in a press release that it hadn’t acquired any funds from Poland and Bulgaria since April 1 and was suspending their deliveries beginning Wednesday. And if these international locations syphon-off Russian fuel supposed for different European prospects, Gazprom mentioned deliveries to Europe might be decreased by that quantity.

    $400 MILLION A DAY

    European Commission President Ursula von der Leyen mentioned the announcement by Gazprom “is yet another attempt by Russia to use gas as an instrument of blackmail.”

    Europe is just not with out some leverage within the dispute, because it pays Russia $400 million a day for fuel, cash Putin would lose with an entire cutoff.

    Russia, nevertheless, rejected the concept it was utilizing blackmail whereas warning it might halt fuel provides to different European prospects if additionally they refuse to modify to paying in rubles.

    Putin’s spokesman, Dmitry Peskov, argued that the Russian demand to modify to paying for fuel in rubles resulted from Western actions that froze Russian exhausting forex property. He mentioned these had been successfully “stolen” by the West in an “unprecedented unfriendly action.”

    Polish Prime Minister Mateusz Morawiecki advised Poland’s parliament that he thinks the suspension was revenge for brand new sanctions towards Russia that Warsaw imposed over Russia’s invasion of Ukraine. Morawiecki referred to as it an “attack on Poland” and an instance of “gas imperialism” whereas vowing that Poland wouldn’t be cowed by the cutoff. He mentioned the nation was secure from an vitality disaster because of years of efforts to safe fuel from different international locations.

    “We will not succumb to Russia’s gas blackmail,” he advised lawmakers, to applause. He additionally sought to guarantee residents that the fuel cutoff wouldn’t have an effect on Polish households.

    INDEPENDENCE FROM RUSSIAN ENERGY

    Some Poles and Bulgarians welcomed the cutoff for transferring them nearer to independence from Russian vitality.

    “I don’t know what the results will be for regular citizens like myself,” mentioned Nina Rudnicka, a lecturer at Poznan University. “But I believe that one should not bow to Russia’s blackmail. It was the right decision not to change to payment in rubles.”

    Dobrin Todorov, a resident of Sofia, the Bulgarian capital, mentioned given a “choice between freedom and dignity or gas, the answer is clear, in favour of freedom and dignity.”

    “So we will go through this ordeal. It cannot be compared to the hardship and tribulations that the Ukrainian people are currently suffering,” Todorov added.

    NEW POLISH SANCTIONS

    The new Polish sanctions towards Russia, introduced Tuesday, focused 50 Russian oligarchs and firms, together with Gazprom. Hours later, Poland mentioned it had acquired discover that Gazprom was reducing off its fuel provides for failing to pay in Russian rubles. Poland’s fuel firm, PGNiG, mentioned the fuel provides from the Yamal pipeline stopped early Wednesday.

    Russian fuel provides to each Poland and Bulgaria already had been anticipated to finish later this yr anyway.

    Poland depends on coal for 70% of its vitality wants, with fuel solely making up round 7% of its vitality combine. Several years in the past, the nation opened its first terminal for liquefied pure fuel, or LNG, in Swinoujscie, on the Baltic Sea coast. A pipeline from Norway is because of begin working this yr.

    Bulgarian Prime Minister Kiril Petkov, whose authorities has been reducing most of the nation’s previous ties with Russia, referred to as Gazprom’s suspension of fuel deliveries “a gross violation of their contract” and “blackmail.” He vowed to defend the nation’s pursuits and “support military-technical assistance to Ukraine.”

    “Unfortunately, in the recent past we were treated as Russia’s fifth column. And there are many political and economic circles that protect Russia’s interests,” he mentioned. “We and our party will protect only Bulgarian interests.”

    In Bulgaria, the principle customers of fuel are district heating firms. Bulgaria’s vitality minister mentioned his nation can meet the wants of customers for a minimum of one month.

    “Alternative supplies are available, and Bulgaria hopes that alternative routes and supplies will also be secured at the EU level,” Energy Minister Alexander Nikolov mentioned.

    Russia’s transfer raised wider issues that different international locations might be focused subsequent as Western international locations enhance their assist for Ukraine amid a warfare now in its third month.

    The Greek authorities held an emergency assembly Wednesday in Athens. Greece’s subsequent scheduled cost to Gazprom is due on May 25, and the federal government should determine whether or not it is going to adjust to the demand to pay in rubles.

    GREECE PLANS TO SWITCH TO DIESEL

    Greece is ramping up its liquefied pure fuel storage capability, and has contingency plans to modify a number of business sectors from fuel to diesel as an emergency vitality supply. It has additionally reversed a program to scale back home coal manufacturing.

    “It appears there is some posturing by Gazprom,” mentioned Gianna Bern, a University of Notre Dame finance professor. “There are probably fewer consequences to turning off natural gas supplies to Poland and Bulgaria than larger countries in Europe. Russia is definitely sending a message.”

    If European nations determine to not pay in rubles, Russia can promote its oil elsewhere, comparable to to India and China, as a result of oil primarily strikes by ship.

    It has fewer choices with pure fuel, as a result of the pipeline community that carries fuel from Russia’s enormous deposits in northwestern Siberia’s Yamal Peninsula doesn’t join with pipelines that run to China. And Russia solely has restricted services to export super-chilled liquefied fuel by ship.

  • Europe fuel disaster hinges on chilly, excessive costs luring provide

    Europe’s pure fuel disaster isn’t letting up. Reserves are low. Prices are excessive. Utility prospects are getting hit with greater payments. Major Russian provider Gazprom isn’t promoting fuel prefer it used to.
    It all raises the query: How precisely is Europe, which imports most of its vitality, going to make it by means of the winter with out a fuel catastrophe, particularly if the season seems to be colder or longer than regular? Here’s how the European Union, dwelling to 447 million folks, will attempt to take care of the disaster:
    THE PROBLEM IS LOW STORAGE LEVELS 
    Utilities flip to fuel saved in underground caverns to deal with sudden further demand for fuel for heating or electrical energy. But Europe began 2021 with fuel storage solely 56% full, in contrast with 73% a 12 months earlier. The causes differ: chilly climate final winter, lack of Russian deliveries on the spot market and sturdy demand in Asia for liquid pure fuel that comes by ship. Europe’s affiliation of pipeline operators says chilly climate would imply needing to import 5% to 10% extra fuel than the utmost volumes noticed in recent times to keep away from the chance of shutoffs.

    AS A RESULT, GAS PRICES HAVE SOARED
    The benchmark value in Europe is round 80 euros per megawatt hour, greater than 4 occasions its degree of 19 euros at first of 2021 and up from as little as 4 euros in 2020. Prices have eased from as a lot as 9 occasions their degree at first of final 12 months. That value shock is feeding by means of to utility payments, alarming shoppers and politicians.
    EUROPE IS RELYING ON HIGH PRICES ATTRACTING MORE SUPPLY
    Analysts at Rystad Energy used ship-tracking knowledge final month to look at 11 tankers bringing liquid pure fuel, or LNG, to Asia make U-turns in the course of the ocean to reap the benefits of profitable gross sales in Europe. With costs so excessive, merchants had been tempted to divert cargoes to Europe even when they needed to provide 100% of the value as compensation, analysts at knowledge agency Energy Intelligence mentioned.

    “I wouldn’t say that LNG is 100% enough, but it will play a very important role” in Europe’s vitality resolution, mentioned Xi Nan, head of liquid pure fuel markets at Rystad. But she added a caveat: “Depending on how much Europe is willing to pay.”
    RUSSIA HASN’T SENT AS MUCH GAS
    State-owned Gazprom has bought much less short-term fuel by means of its pipelines crossing Poland and Ukraine and hasn’t crammed as a lot of its European storage because it usually does, although it seems to be fulfilling its long-term contracts. Analysts imagine Russia could also be underlining its need for Europe to approve the Nord Stream 2 pipeline to Germany that bypasses Poland and Ukraine. There are also elevated tensions with Europe over Russian troop deployments close to the Ukraine border.

    LETTING STORAGE FALL TOO LOW CAN BE A PROBLEM
    As storage caverns are depleted towards winter’s finish, the stress falls and fuel comes out extra slowly. That means reserves may not fall all the way in which to zero however would possibly ship fuel too slowly to fulfill a sudden surge in demand.

    IN THE SHORT TERM
    European governments are providing money subsidies to shoppers to melt the blow. Sweden turned the most recent Wednesday by saying 6 billion kronor ($661 million) to assist households most affected by greater electrical costs.
    LONGER TERM
    The resolution is extra funding in renewables akin to wind and photo voltaic. Yet officers concede fuel will play a task for years throughout that transition.
    POLITICAL UNREST IN KAZAKHSTAN ISN’T CONTRIBUTING
    The resource-rich Central Asian nation provides oil to the EU, however not fuel, and the oil move wasn’t affected by violent protests that started over hovering gas costs however rapidly unfold, reflecting wider discontent over Kazakhstan’s authoritarian authorities.
    EUROPE REMEMBERS WHAT A BAD WINTER CAN MEAN
    A late-winter chilly snap in 2018 despatched vitality costs skyrocketing. Britain warned that some industrial makes use of of electrical energy powered by pure fuel might face shutoffs. It didn’t come to that, however nobody desires to see that situation. Nor a repeat of the disruption from January 2009, when a pricing dispute between Gazprom and Ukraine led to a two-week shutoff in southeast Europe. It lower off fuel warmth to 70,000 residences in Sarajevo, the capital of Bosnia-Herzegovina, forcing folks to stick with kinfolk and emptying shops of house heaters.
    IF ALL ELSE FAILS: EU
    Legislation requires international locations to assist one another within the case of a fuel shortfall. Governments can declare a fuel emergency and shut off industrial prospects to spare households, hurting the economic system however sparing a humanitarian and political catastrophe.
    In concept, they’ll demand cross-border fuel provides from one another. In current years, Europe has constructed extra reversible pipeline connections however not sufficient to cowl the whole continent, leaving some international locations extra uncovered than others.
    Yet the system has by no means been examined, and there are questions on how keen international locations could be to share fuel in a disaster. The European Commission, the EU’s govt department, is engaged on revising the foundations to incorporate joint fuel purchases however on a voluntary foundation, mentioned Ruven C. Fleming, vitality regulation blogger and assistant professor on the University of Groningen within the Netherlands.
    The revision “is a quite clear indication that even those who installed the mechanism don’t think it would work very well,” Fleming mentioned.