Gazprom Group announced on Sunday that shipments of Russian gas to the European Union and Turkey fell sharply between January and April compared to the same period last year, while shipments to China rose.
The Russian state group announced in a statement that “exports to countries outside the Commonwealth of Independent States (the European Union and Turkey) amounted to 50.1 billion cubic meters, or 26.9% less than in the same period in 2021.”
Gazprom said it would continue to supply gas “in full compliance with contractual obligations”.
During the same period, the gas giant indicated that its production declined by 2.5 percent within one year to 175.4 billion cubic meters.
Also, deliveries to the local market decreased by 3.7 percent “especially due to the hot weather in February”.
On the other hand, exports to China increased by 60% in a year through the Power of Siberia pipeline.
Gazprom also reported that gas reserves in European underground storage facilities amounted to 6.9 billion cubic meters.
“To achieve the target of 90% filling storage facilities set by the European Union, companies will have to pump an additional 56 billion cubic meters of gas,” Gazprom said.
The group stressed that “re-establishing gas reserves in underground facilities in Europe represents a very serious challenge,” stressing that the daily delivery capacity has technical limits and that “the total amount of gas available in the European market depends on demand in the emerging Asian market.”
Energy prices are rising in Europe because the European Union has not yet decided to impose an oil and gas embargo on Russia.
In 2021, Gazprom recorded a record net profit that increased thirteen times in a year to 2,159 billion rubles (approximately 28 billion euros at the current price), driven by a significant increase in demand for hydrocarbons.
(AFP)
Tag:
natural gas
Russia cuts off natural gas supply… EU “weapons energy”
written by Alexandra Hartman Editor-in-Chief
◀ anchor ▶
Russia has stopped supplying natural gas to NATO allies Poland and Bulgaria.
Major European countries have criticized Russia for weaponizing energy.
By Park Young-il, staff reporter.
◀ Report ▶
Russian state-owned gas company Gazprom has stopped supplying natural gas to Poland and Bulgaria on the 27th local time.
The reason is that the two countries did not pay for gas in rubles as requested by Russia.
As the so-called ‘energy weaponization’ feared by the West began in earnest, European gas prices jumped more than 20% right away, and the euro’s value fell to its lowest level in five years.
The European Union has strongly criticized Russia’s gas supply cutoff, even though it is ready for Russia’s gas supply cutoff scenario and negotiations are ongoing among member states.
[우르줄라 폰데어라이엔/EU 집행위원장]
“Gazprom’s unilateral stoppage of gas supplies to EU member states is another Kremlin provocation.”
The Korean government has also decided to supply some of its natural gas to Europe at a level that does not affect domestic supply and demand and prices.
However, Russian President Vladimir Putin raised the level of the offensive, stating that he would quickly retaliate if a third country intervened in Ukraine.
[블라디미르 푸틴/러시아 대통령]
“If we intervene in Ukraine and create a strategic threat to Russia, we need to know that our retaliatory strike will be lightning fast.”
Russia appears to be declaring a head-to-head confrontation with the West, such as meeting Japanese and Norwegian diplomats, following the previous statement that it had directly struck and destroyed the weapons the West had supplied to Ukraine.
This is Park Young-il from MBC News.
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On Friday, French President Emmanuel Macron considered that asking Russian President Vladimir Putin to pay for gas shipments to the European Union in rubles, not in dollars or euros, “is not possible” and “is not provided for in the contracts.”
In response to a question put to him following the European summit in Brussels regarding the declaration issued by Moscow on Wednesday, Macron said that the Russian request “is not in line with what was signed, and I see no reason to implement it.”
“We continue our analytical work,” he added, but “all the signed texts are clear: this is prohibited. So European players who buy gas and are on European soil have to pay in euros.”
Emmanuel Macron stressed that “it is not possible to do what is required, which is not stipulated in contracts.”
With this demand, the French president considered that Moscow is seeking to establish a “bypass mechanism” on the economic and financial sanctions imposed by the Europeans in the wake of the invasion of Ukraine.
For its part, Germany, concerned with buying Russian gas, denounced the “breach of contract” by Putin, who gave his government a week to set up the new ruble payment system.
Germany relies heavily on Russian gas, which represents regarding 55 percent of its total gas imports.
Despite the war in Ukraine, Russian gas continues to flow into the European Union, which refuses to ban it. But European countries pledged to speed up reducing their dependence on Russian gas.
“We are a very big buyer of Russian gas, and what we consider a weakness for us is also a weakness for Russia, which cannot change the structure of its pipelines overnight,” the French president said.
Putin’s orders
The Kremlin said on Friday that President Vladimir Putin had ordered Russia’s energy giant Gazprom to accept payments for its natural gas exports to Europe in rubles and that it should work out how to convert billions of dollars in sales into rubles within the next four days.
On Wednesday, Putin announced the first in a series of reactions to what the Kremlin described as declaring economic war on the world’s largest nuclear power.
Putin said that Russia, which supplies 40 percent of Europe’s gas needs, expects to get in return for selling natural gas in rubles, in one of the strongest shifts in Russian energy policies since the Soviets built pipelines to transport gas from Siberia to Europe in the early 1970s. .
This would also present a potential problem for Gazprom, the world’s largest natural gas company by reserves.
“There are instructions issued by the President of the Russian Federation to Gazprom to accept payments in rubles,” Kremlin spokesman Dmitry Peskov told reporters.
Peskov added that Gazprom has four days to arrange a ruble payment system. “Buyers of Gazprom products will be informed of this information,” he said.
As European Union countries battle each other over imposing an additional set of sanctions on Russia this week, Putin said the United States and the European Union had defaulted on their commitments and eroded confidence in dollar and euro assets by freezing Russia’s reserves abroad.
“Absolutely, there is no sense in supplying the European Union and the United States with goods in exchange for the dollar, the euro and other currencies,” he said.
The mechanism by which Russian gas exports, worth up to $880 million per day, will be paid for, remains unclear. Payments in euros represent 58 percent of Gazprom’s exports, while payments in dollars constitute 39 percent, while payments in pounds sterling represent regarding 3 percent.
Putin’s move represents a revolution in the gas market, as the communist Soviet Union itself accepted the payment of the value of its energy exports in foreign currencies. It was not immediately clear whether switching to euro payments would be a breach of contract. Many importing companies said long-term contracts with Gazprom stipulate that payments are to be made in euros or US dollars, not Russian rubles.
(agencies)
The LNG ports in Spain might play an important role in Europe’s gas supply security in the future.
Foto: Alamy Stock
Spain would like to play a central role in restructuring the gas supply in the EU in the wake of the Ukraine war. The Catalan daily newspaper La Vanguardia reported a month ago that Madrid and NATO were considering reactivating the MidCat project. It was put on hold in 2019. The newspaper reported that the planned pipeline might reduce the “heavy dependence” on Russian gas by pumping gas from Algeria and liquid gas from terminals in Spain and Portugal “into the heart of Europe”.
Even before the start of the Ukraine war, unnamed sources in the Spanish government were quoted, according to which the revival of a “new cross-border connection with France” was now “on the NATO table”. The social-democratic government in Madrid is still officially reluctant to comment on the plan. The problem for Pedro Sánchez’s government is that it was they who pushed for stopping the project for the time being in 2019.
In Catalonia, where there was also strong resistance from environmentalists once morest MidCat, the large business association “Foment del Treball” is now pushing for reactivation. In a letter to Sánchez, he has just called for the “urgent” continuation of the project in order to position itself as a “gas hub” in southern Europe. “Being less dependent on supplies from Russia is a geostrategic and economic priority and a weapon to stop Russian expansionism,” said association president Josep Sánchez Llibre, recalling that the project was agreed in 2013 between France, Spain and Portugal .
The tube from Barcelona, where the largest regasification plant in Europe is located in the port, has even been laid as far as Hostalric on the edge of the Pyrenees. The pipeline was to run a total of 235 kilometers to Barbaira in France. But the section called “South Transit Eastern Pyrenees” (Step) was denied permission. Officially, this was justified by a lack of necessity and high costs for a project that the EU had until 2018 on the list of “priority infrastructure” in Brussels. The pipeline “does not meet market needs” and is “not mature enough to be considered,” energy regulators in Spain and France argued when it was shelved in 2019. The cost argument from the French side is even justified, because France should raise two-thirds of the 3.1 billion euros that had been estimated for it. Spain should be the main beneficiary.
So it was also a political decision in Madrid in the dispute with the renegade Catalans not to invest in the region. It was a decision once morest their own interests in the country. The Social Democratic Environment Minister Teresa Ribera also put forward climate protection arguments once morest it. However, according to proponents, the blockade now poses a problem for the security of supply in Europe, because MidCat should actually have gone into operation this year. Completion before 2024 or 2025 is no longer an option.
However, the pipeline might only modestly reduce energy dependency on Russia at best. With a capacity of a good seven billion cubic meters per year, the aim is to double the amount of gas that has been fed into the French grid from the Iberian Peninsula in two pipelines via the Basque Country. But that would still only be a fraction of the capacity that Nord Stream 2 should deliver with 55 billion cubic meters and that Nord Stream 1 has.
There is also the question of where the gas that is to flow to Central Europe via MidCat is to come from. At the moment, even Spain is no longer receiving enough gas from Algeria. Algeria stopped supplying gas to the neighboring country following contracts expired because of the war in Moroccan-occupied Western Sahara. For this reason, Morocco repeatedly accuses Algeria of being a »partisan at war« and of supporting the Polisario liberation front in Western Sahara.
Since no more gas flows to the neighbors, no more gas is currently reaching Spain and Portugal via the Maghreb-Europe pipeline. The direct Medgaz pipeline cannot compensate for the failure, which is why Spain is also increasingly relying on liquefied gas ship deliveries.
Access to the Spanish and Portuguese liquid gas terminals, which the German Federal Minister of Economics Robert Habeck (Greens) is now banking on, should also be improved via MidCat. The liquefied gas produced by the world’s largest gas producer, the USA, using the fracking method, is particularly harmful to the climate – according to experts even more harmful than coal. So far, there are regasification plants in Spain and Portugal, and thus regarding 30 percent of the total capacity in the EU.