EU says ready for Russian energy weapon

The European Union said on February 16 the bloc is ready in case the Russian leadership decides to weaponize the energy issue. In a speech… Read More »

EU says ready for Russian energy weapon

The European Union said on February 16 the bloc is ready in case the Russian leadership decides to weaponize the energy issue.

In a speech at the European Parliament on EU-Russia relations, European security and Russia’s military threat against Ukraine, European Commission President Ursula von der Leyen told lawmakers, at a time of high demand, Russian gas monopoly Gazprom is restricting its gas supplies to Europe. “A ten-year low in storage, no sales on the spot market. This behavior has already damaged Russia’s credibility as a reliable energy supplier,” von der Leyen said.

The Commission said it is currently in talks with several countries that are ready to step up their exports of liquefied natural gas (LNG) to the EU. This resulted in January in record deliveries of LNG gas – more than 120 vessels and 10 billion cubic meters of LNG. “On top, since the annexation of Crimea, we have increased the number of LNG terminals. We have reinforced our pan-European pipeline and electricity interconnector network. And the good part is that these investments in infrastructure will in future be the backbone of green hydrogen supply. During the last weeks, we have looked into all possible disruption scenarios in case Russia decides to partially or completely disrupt gas supplies to the EU,” von der Leyen said.

“And I can say that our models show that we are now rather on the safe in this winter. On top of this, we have also developed with Member States a new set of emergency measures, which we could trigger in case of complete disruptions. But one of the lessons we can already draw from this crisis is that we must diversify our energy sources, to get rid of the dependency of Russian gas, and heavily invest in renewable energy sources. They are clean and good for the planet, and they are home-grown and good for our independence,” she added.

Gazprom said on February 16 the Russian gas giant produced 70.1 billion cubic meters of gas between January 1 and February 15, which is the best result in the last three years.

The level of domestic supplies from the gas transmission system is commensurate with that of the record-breaking year of 2021, Gazprom said in a press release, citing preliminary data.

However, Gazprom’s gas exports to the countries beyond the Former Soviet Union (FSU) amounted to 17.9 billion cubic meters, which is 35.5% or 9.8 billion cubic meters lower than the figure for the same period of 2021, the Russian gas monopoly said.

At the same time, Gazprom increased its supplies to such countries as Turkey by 2.7%, Bulgaria by 24.2%, and Bosnia and Herzegovina by 13.9%.

“The Company continues to deliver gas as requested by consumers in full compliance with contractual obligations,” Gazprom said.

The Russian gas giant has been accused of withholding extra production that could be released to lower soaring prices.

In January, EU Commission Executive Vice President for Competition Margrethe Vestager said the EU is currently looking into all allegations of possible anti-competitive conduct by companies producing and supplying natural gas to Europe, including Gazprom, with a view to verifying whether the current situation on the wholesale gas markets in Europe can be attributed to commercial conduct by market participants. “We are looking into this as a priority because it is thought provoking that a company in view of increasing demand limits supply. That is quite rare behavior in the marketplace,” Vestager said.

Meanwhile, Gazprom said on February 16 gas as exports to China via the Power of Siberia pipeline keep growing within the framework of the long-term bilateral contract between Gazprom and China National Petroleum Corporation (CNPC). “February 14 marked a new record for daily supplies,” Gazprom said.

The Russian company said, according to Gas Infrastructure Europe, working gas inventories in Europe’s underground gas storage facilities were lagging behind last year’s level by 22.3% or by 9.2 billion cubic meters as of February 14. As much as 93.4% of the gas injected during the summer period is already withdrawn, which means that less than 7% is left. The total amount of working gas inventories in European UGS facilities was as low as 32 billion cubic meters on February 14, falling by 1.3 billion cubic meters below the historical minimum for this date, Gazprom said.

The Russian company warned that the withdrawal of gas from Europe’s UGS facilities usually continues until late March to mid-April.

Gazprom said the inventories in Ukraine’s UGS facilities have dropped to 10.7 billion cubic meters and are now 45.7% or 8.9 billion cubic meters below the level of last year and 4.6 billion cubic meters below the level observed at the start of the injection period in April 2021.

Russia has built the controversial Nord Stream 2 gas pipeline from Russia to Germany bypassing Ukraine. Moscow hopes the gas crisis and price spikes seen in Europe this year, and the inevitability of high prices this winter, will guarantee that Nord Stream 2 will be approved by Germany and the EU and become operational in 2022.

At a joint press conference with German Chancellor Olaf Scholz in Moscow on February 15, Russian President Vladimir Putin argued that Nord Stream 2 is a “purely commercial” project which will strengthen Europe’s energy security. “This is one of Europe’s largest infrastructure projects, aimed at significantly strengthening energy security on the continent,” Reuters quoted Putin as saying. “I have said more than once that this project is purely commercial, and that there are no politics, nor any political tinge, here,” the Kremlin leader added.

Putin once again said that Russian gas is much cheaper under long-term deals with Gazprom than on the spot market.

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