Russia threatens to cut gas supplies through Ukraine – CNN | CarTailz

CNN business

Europe is preparing for further cuts in its supply of Russian natural gas as Moscow threatens to cut supplies to Moldova, a country on Ukraine’s southwestern border.

This was announced by the Russian state gas giant Gazprom on Tuesday would cut supplies to the country from Monday over controversial claims that Ukraine is holding back some of the gas as it passes through its territory.

On its official Telegram account, the company said it would cut gas flow through the Sudzha transit point by the amount it claims is preventing Ukraine from reaching Moldova.

“The amount of gas delivered by Gazprom (GZPFY) to GIS Sudzha for transit to Moldova through the territory of Ukraine exceeds the physical amount transferred at the Ukraine-Moldova border,” it said.

Ukraine has denied holding back gas supplies to its neighbors. This was announced by the Ukrainian state-owned energy company Naftogaz on Tuesday tweet that “Gazprom accused Ukraine of stealing gas. Once again. In short: That’s not true.”

Gas Transmission System Operator of Ukraine (GTSOU) said in a statement that all Russian gas was received at the Sudzha entry point for onward transportation to Moldova was transferred to exit points along their common border.

The operator said Moldova had initiated a “virtual rollback” of some of its Russian gas imports back to Ukraine, but without giving a reason.

One such reversal is a joint trading arrangement in which some of the gas destined for a given site is diverted to storage or sold to another buyer, analysts said.

“This is not the first time that Russia has resorted to gas as a political tool. It is manipulating facts to justify its decision to further limit the volume of gas supplies to European countries,” said Olga Bielkova, Director of Government and International Affairs at GTSOU.

Henning Gloystein, director of energy, climate and resources at Eurasia Group, told CNN Business that Moldova “historically has stored some of its gas in Ukraine… so the argument is that it’s held in Ukraine by Ukraine.” becomes, contentious”.

Moldova is not a member of the European Union but is in the application process.

Russia supplies Moldova with about 5 million cubic meters of gas per day, a tiny fraction of the gas the European Union uses every day to power its homes and businesses, data from the Independent Commodity Intelligence Service shows.

But the move raises the specter of a further reduction in gas supplies to the European Union through Ukraine, one of only two routes through which Russia still pipelines gas into the bloc. Russia also sends gas to Europe via the TurkStream pipeline, which runs through Turkey to Bulgaria.

“Small cuts usually lead to big cuts,” Kateryna Filippenko, chief analyst for global gas markets at consultancy Wood Mackenzie, CNN Business, referring to Moscow’s progressive gas cuts through the Nord Stream 1 pipeline over the summer.

In June, Gazprom reduced flow through the vital pipeline to 40% of its capacity. By September there was no gas at all.

“The risk of it cutting through Ukraine is very, very high,” Filippenko said, adding that she expects a full shutdown before the end of the year.

European natural gas prices rose 4% on Wednesday, but at €124 ($128) per megawatt-hour they remain 64% below the record level earlier this year.

If Russia halted exports through Ukraine, Europe would lose about 4 billion cubic meters of gas — or just 1% of its estimated 2022 gas needs – between December and March, said Filippenko.

Even if that happens, Europe will likely be able to cope, at least in the short term. According to data from Gas Infrastructure Europe, the continent’s gas storage facilities are almost 95% full. This is thanks to a concerted effort by EU member states over the summer to stock up ahead of the colder months and increase imports from alternative suppliers and LNG.

And the unusually mild weather in Europe early in the winter has helped limit the amount of gas that needs to be withdrawn from those stockpiles.

In this regard, a complete closure of the Moscow gas pipeline by Ukraine would cause “minimal” damage, Filippenko said.

Leave a Comment