Sanctions against Russian pipelines heighten fears of gas outage

BERLIN (AP) — Natural gas prices soared Friday after Russian state exporter Gazprom said it would no longer send supplies to Europe via a pipeline in Poland, citing new sanctions Moscow had imposed on European energy companies. The move won’t immediately block large volumes of natural gas to Europe, but raises fears that the war in Ukraine may be… will lead to far reaching cut-offs

Gazprom said Thursday it would ban the use of the Yamal pipeline reaching Germany through Poland. While that cuts off a supply route to Europe, the pipeline’s access point to Germany has not been used in recent months. In addition, Gazprom has already cut off the gas supply to Poland because he refused to comply with Moscow’s requirement to make payments in rubles.

“There is a ban on transactions with and payments to persons under sanctions. In particular, for Gazprom, this means a ban on the use of a gas pipeline owned by (the Polish company) EuRoPol GAZ to transport Russian gas through Poland,” Gazprom representative Sergey Kupriyanov wrote in a Telegram message.

The fear is that gas conflicts and restrictions will continue to escalate during the war in Ukraine† Last month, Gazprom said it had completely cut off natural gas supplies to Poland and Bulgaria about the ruble dispute.

On Tuesday, Ukraine’s pipeline operator shut down a pipeline carrying gas from Russia to Europe, saying Russian forces interfered with a compressor station in Russian-occupied territory and diverted gas. It asked Gazprom to move gas through another pipeline, which the company said it couldn’t do. By itself, the shutdown was not expected to cut off large amounts of gas.

Energy tensions escalated as Russia imposed sanctions on Wednesday against Gazprom Germania, a subsidiary of the Russian supplier that the German government took control of in April.

German Vice Chancellor Robert Habeck said gas losses from the Russian relocations were “manageable” at about 10 million cubic meters per day and could be offset from other sources.

The actions further shaken the volatile energy markets. Natural gas traded Friday at 104 euros per megawatt hour, against 94 euros before the announcements.

“Moscow has fired a second salvo of gas disruption at Europe, sparking new uncertainty and rising prices,” said Kaushal Ramesh, senior analyst at Rystad Energy.

European utilities and governments have made efforts to replenish underground gas storage that was empty over the winter and have made sufficient progress to cover gas needs for the year without Russian inventories† But they would struggle to get through the end of the coming winter without rationing. High natural gas prices have led to higher bills for heating and electricity at home generated by the fuel.

European governments try to get rid of Russian energy and the EU’s executive committee has proposed measures to cut imports from Russia by two-thirds by the end of the year. Whether that is feasible remains to be seen.

Before the war, Europe got 40% of its natural gas and 25% of its oil from Russia

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