Europe Tries to Survive Without Russian Gas, But Fails

Several dozen Polish districts were left without gas after Poland imposed sanctions on firms associated with Russia. As the Deputy Minister of Internal Affairs of the Republic, Pavel Shefernaker, stated today, on April 28, the authorities are trying to do everything possible to restore gas supply to these areas.  


We are talking about Novatek Green Energy, which, after being included in the Polish sanctions list, stopped supplying liquefied petroleum gas to its Polish consumers.

“We have 2.5 thousand gminas (small administrative-territorial units) in Poland. There are problems in several dozens [of them]. We are doing everything to ensure that the gas returns to these gminas as soon as possible,” Schefernaker said.

According to him, the Ministry of Internal Affairs of the country could not inform the regional authorities about the sanctions in advance, since “decisions on the inclusion of firms in the list of enterprises covered by sanctions were made in a confidential mode.” In order to restore the gas supply, the authorities intend to seize the infrastructure owned by the Russian company.

In turn, Kremlin Spokesman, Dmitry Peskov, on Wednesday, April 27, said some European countries hurt their own economies by refusing to pay for gas in rubles as they seek to punish Russia. He said Russian President Vladimir Putin had mentioned that nothing essentially changed for the buyers of gas.

“It’s not about any additional difficulties or any losses or price changes that might happen due to foreign exchange rate,” Peskov said.

According to him, this refusal to pay in rubles is a kind of sacrificing of economies to some “absolutely contrived political prejudice, a desire to punish our country by any means, even to the detriment of their own taxpayers and consumers of gas.”

The spokesman said the risks that Russia is facing due to the shift to payments for gas in rubles have been taken care of.

“Certainly, everything has been calculated,” Peskov said. “All the risks were forecast and required measures were taken.”

German company agreed to pay for Russian gas in rubles

The German energy holding Uniper, the largest importer of Russian gas in Germany, will transfer payments for Russian gas to a Russian bank, and not to a European one, as stated in the Rheinische Post newspaper with reference to a company representative.

“The plan is to make our payments in euros to an account in Russia,” the message says.

As reminded, on April 27, Gazprom suspended gas supplies to Bulgargaz (Bulgaria) and PGNiG (Poland) due to non-payment in rubles. On the eve of Uniper stated that it believes that the stoppage of Russian gas supplies to Poland and Bulgaria does not threaten the flow of Russian gas to Germany, transit volumes to other countries will not be affected. The company’s financial director Tiina Tuomela said that the holding continues negotiations with Gazprom PJSC on the issue of paying for gas in rubles.

In addition, Hungarian Foreign Minister, Peter Szijjarto, confirmed to CNN that his country will use the payment scheme introduced by Russia for Russian oil and gas. Szijjarto added that Hungary has no alternative sources or routes that would allow them to stop importing Russian energy in the next few years.

Situation is worsening, with the only solution leading back to Russia

Anyway, the applications for the supply of Russian gas to Europe through the territory of Ukraine have increased, despite the actual refusal of Warsaw from purchases. Poland has decided to receive gas from Germany, but this gas must appear from somewhere on the German market.

The nomination for pumping gas through the territory of Ukraine during the day on April 27 was revised from 49.8 million cubic meters to 64.8 million cubic meters, the application for April 28 is 63.4 million cubic meters.

Having refused the new form of payment for Russian gas, Poland actually refused further supplies from Gazprom, which stopped on the morning of April 27. Instead, Polish importers have increased gas extraction from Germany.

On Thursday, the reverse flow through the Yamal-Europe gas pipeline increased to 1.3 million cubic meters per hour, according to the data of the gas transportation operator Gascade. If we recalculate this volume for a year (10 billion cubic meters. m), then this just corresponds to the volume of the annual contract with Russia.

The decisions of Poland and Bulgaria to provoke the termination of Russian gas supplies caused an increase in gas prices in Europe. The contract “for the day ahead” at the TTF hub has grown to $1,150 per thousand cubic meters. By refusing supplies from the East, such players will inflate the price on the spot market of Europe. Thus, the price of gas will increase for all buyers.

It is noted that Europe has opened the season of gas injection into underground storage. At the moment, the reserves are 32 per cent, the growth over the past day is 0.2 percentage points. The current level of reserves in Europe’s UGS lags behind the five-year average by 6.4 percentage points. The refusal of Poland and Bulgaria to purchase Russian gas will increase the deficit in the market and further reduce the pace of pumping.

Ru-Main, 28.04.2022
Source: TASS, Interfax 

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