The head of the Ukrainian state-supported pipeline company described Russia’s refusal to deliver additional natural gas supplies to Europe as “extortion,” and fuel prices have risen to their highest level in 13 years.
Sergey Makogon, chief executive officer of the Ukrainian gas transmission system operator, stated that he believed that Gazprom was deliberately Withdraw Refusing to send additional gas through Ukraine to force approval of the disputed Nord Stream 2 pipeline from the Baltic Sea to Germany.
“[Europe] Gazprom’s price extortion should not be followed,” Makogon told the Financial Times. He argued that if Russia increased production, it could have curbed natural gas prices from doubling this year. The supply from Russia is Dropped by nearly one-fifth The pre-pandemic level until 2022.
“[The supply tightness in Europe] It is a man-made problem. “
Gazprom, which monopolizes the export of Russian pipeline natural gas, declined on Tuesday to book additional quantities through Ukraine in a closely watched monthly auction, which aims to supplement its exports to Europe, thereby triggering further price increases.
Gazprom, which has fulfilled its long-term contract in Europe, declined to comment on this allegation, but said last week that its natural gas flow “optimization” and meeting customer requirements are normal.Company executives have Pointed out earlier Once Nord Stream 2 is launched, more natural gas will be available.
Although the decrease in Russian supply is not the only reason for the increase in natural gas prices, due to long winter storage depletion and strong global demand, executives and traders question Gazprom’s silence on increasing exports.
According to James Huckstepp of S&P Global Platts, Gazprom may undermine the company’s desire to be regarded as a reliable partner, especially In the case that other pipelines in Russia will stop maintenance next month.
“During the maintenance period of the northern transport route, Gazprom did not book interruptible capacity through Ukraine… It may put them at risk for claiming to be the most reliable supplier in Europe,” Huckstepp said.
An EU official stated that the Commission “has no indication that any of our suppliers have specifically acted to raise prices”.
“The current situation reflects global market dynamics. All EU regions now have access to multiple natural gas sources, so they are less susceptible to tight supply from a single supplier,” the official said.
Nord Stream 2 crosses the Baltic Sea to reach Germany and will be approved later this year, although the September elections in Germany may complicate the signing.
This pipeline that is about to be completed has become the target of US sanctions. It has also been opposed by countries such as Poland, who believe it will give Russia additional influence over Europe’s energy supply, while weakening Ukraine by allowing Moscow to bypass the country.
Polish Foreign Minister Zbigniew Law criticized Germany’s support for the pipeline on Wednesday. He wrote in the Frankfurt report, “The completion of the North Steam 2 will create a huge security deficit in the east wing of NATO, and Ukraine will discover I am in a security breach”.
Russia has long been looking for alternative transit routes to Ukraine. In 2014, Moscow annexed Crimea on the Black Sea peninsula and continued to support the proxy war in eastern Ukraine.
Some analysts said the shift to so-called interruptible contracts may have had an impact on the supply situation. In theory, these contracts will enable Ukraine to take Gazprom’s supply offline and turn it to benefit other customers.
“[That] Laurent Ruseckas, an analyst at IHS Markit, said this means that Gazprom cannot guarantee that it can provide European buyers with the promised natural gas.
However, Makogon said that the interruptible contract has been agreed with Gazprom and that the Ukrainian TSO would be happy to discuss a confirmed contract if Russia wants it. “If Gazprom will contact us formally and ask:’Let’s stay firm’, we will definitely consider this and determine how to solve this problem,” Makogon said.
Makogon said that Russia will eventually threaten Europe’s supply tightening this winter, as storage facilities are usually refilled during the summer when heating demand is low.
“Europe may encounter very serious problems in winter,” Makogon said. “If Gazprom asks for an increase in production in August? We will only be happy.”
Additional report by Mehreen Khan in Brussels