Page 7 - EurOil Week 24 2022

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pipeline that runs under the Black Sea to Turkey, “While minor pieces of gas infrastructure can
as the only route for Russian supply into Europe be more easily fixed, heavy, technically complex
that has not been affected. Transit capacity will technology will require maintenance and servic-
come under greater strain when Nord Stream ing that currently would need co-operation with
1 goes offline completely between July 11 and the West,” the analysts said in a research note.
21 for scheduled seasonal maintenance. Turk- On the upside for European gas consumers,
Stream typically undergoes such maintenance Rystad noted that Norwegian pipeline gas flow
over the summer, but Russia has not provided had returned to 317 mcm per day following the
any guidance on this. completion of planned maintenance at infra-
European gas prices have spiked this week structure sites.
on news of the Freeport LNG explosion and the “Still, this will make it a challenge for Europe
curtailment of supply via Nord Stream 1, with to meet its storage target (achieving the 80%
the July contract at the Dutch TTF hub soaring minimum storage level by 1 November) this
by almost 19% on June 15 to over €118 ($123)/ winter as the region is now losing supply from
MWh, building on similar gains earlier in the East and West, and the continent could be in
week. for a winter season of sustained high prices as a
Analysts at Rystad Energy said the problems result,” the Norwegian consultancy said. “As the
at Nord Stream 1 were “a significant test of West- default options for European energy drop away
ern government resolve on sanctions, as well as to the east and west, the region will have to turn
Russia’s technical capacity to operate its sector south to Africa and the Middle East for supplies,
facing the risk of getting less support from West- but the timeline for projects is likely to come too
ern technologies and services.” late for this winter.” ™

Kremlin expects no further cut-offs

in gas supply to Europe

RUSSIA RUSSIA does not expect any further cut-offs in gas The EU itself is striving to phase out Russian
deliveries to Western companies beyond those that gas supply, with the European Commission
have already lost their supply, Kremlin Spokesman calling in its REpowerEU plan for a reduction
Dmitry Peskov announced on June 9. in imports from the country of as much as two
The Kremlin issued a decree at the end of thirds within a single year. But analysts are scep-
March that required gas customers in non- tical that this can be achieved in such a short
friendly countries to set up special accounts at period.
Gazprombank, where their bills will be con- Hungary has been the most vocally opposed
verted from euros and dollars into rubles before to an EU ban on Russian gas, similar to the
being transferred to Gazprom. Since then, Bul- embargoes on Russian coal and oil that the bloc
garia, Finland and Poland have all had their has already introduced. Hungarian Foreign
supply cut off, as well as some companies in Minister Peter Szijjarto on June 10 dismissed
Germany, Denmark and the Netherlands. such a ban as “impossible.”
Gas payments under the new scheme were “When we impose sanctions, then we have to
due in April and May. All those companies that make sure that those sanctions are hurting more
refused to comply with the Kremlin’s decree have those against whom we impose the sanctions
already had their supply cut off and the Kremlin than ourselves,” Szijjarto told CNBC. “We have
does not anticipate any further disconnections, to have a very clear position on the war, which
Peskov told reporters. we do have, we condemn Russia for this military
“No, the system is working, the system has aggression. We stand with Ukraine. But we have
been fixed, and those who receive gas are already to take into consideration reality as well.”
working under the new terms set by the presi- Hungary relies on Russia for 85% of its gas
dential decree,” Peskov said. supply, and 65% of its oil. ™

Week 24 16•June•2022 www. NEWSBASE .com P7