Page 7 - FSUOGM Week 40 2022

FSUOGM COMMENTARY FSUOGM

actual market import price. In other words, gov- other countries that are opposed include the
ernments would shield consumers at their own Netherlands.
expense. Pipeline suppliers such as Norway and
In contrast, an EU-wide gas price cap would exporters in North Africa would be largely una-
see the bloc jointly agree to only pay interna- ble to divert supplies to other markets if such a
tional suppliers a fixed amount for their gas. The price cap were imposed, although they could cut
ministry spokesperson warned that this pro- volumes. Russia has threatened to cut off supply
posal – backed by 15 member states – created altogether if such a measure was introduced.
the risk that gas suppliers would simply direct Meanwhile, LNG exporters such as the US
shipments to other countries and further exac- and Qatar would be more free to send their sup-
erbate supply shortages in Europe. ply to other markets, primarily to Asia. Even
“We do not support an absolute maximum those under long-term contracts could claim
limit – in other words, a rigid price cap – because that the price cap represented a violation of their
there is a risk that we will then no longer be able agreements.
to buy enough gas on the world market at this Various other countries, including Italy, Bul-
price,” the spokesperson said. “And that would garia, Poland and Greece have floated alternative
then be counter-productive if there wasn’t plans for the price cap comprising a rigid max-
enough gas available, because then our security imum price or a so-called dynamic cap, which
of supply would no longer be guaranteed.” would set EU gas prices one euro higher than the
The energy ministers of Belgium, Bulgaria, rival Asian price, the Japan-Korea Marker.
Croatia, France, Greece, Italy, Latvia, Lithua- The group plans to take the unusual step of
nia, Malta, Poland, Portugal, Romania, Slova- drafting their own plan for a bloc-wide gas price
kia, Slovenia and Spain all pledged support for cap, Polish Climate Minister Anna Moskwa said
the EU-wide price cap in a letter to the Euro- on September 30 after the EU meeting, accord-
pean Commission last week. Besides Germany, ing to Reuters. ™

PIPELINES & TRANSPORT

Russia resumes gas supply to Italy

ITALY RUSSIA’S Gazprom has resumed gas supplies On October 3, Eni said it was prepared to pay
to Italy via Austria after resolving an issue with a €20mn ($19.7mn) guarantee to restart deliver-
Supplies were disrupted Austrian regulatory changes, the company said ies of Russian gas through Austria. It is unclear
on October 1 and on October 5. whether that payment was made.
resumed on October 5. Gazprom halted gas flow to Italy on October Prior to Moscow’s invasion of Ukraine, Italy
1, stating that Austria’s gas grid operator had imported 95% of the gas it consumed, of which
refused to confirm transport nominations. The 45% came from Russia. The disruption in supply
Austrian route is now the only route for Italy to notably came just days after Italy’s new right-
receive Russian gas, following the closure of the wing leader Giorgia Meloni publicly backed
Nord Stream 1 pipeline at the end of September, Ukraine. Meloni said that Russian President
and the subsequent major leaks that occurred Vladimir Putin “threatens the security of the
along the pipeline as a result of suspected entire European continent” and that his annexa-
sabotage. tion of four Ukrainian regions has “no legal and
“Transportation of Russian gas through the political value.” ™
territory of Austria is resuming,” Gazprom said,
stating that a “solution” had been found with
Italian buyers regarding regulatory changes in
Austria.
Italy’s Eni confirmed on October 5 that “gas
supplies from Gazprom resumed today” and
welcomed the “resolution by Eni and the parties
concerned of the constraints resulting from the
new regulations introduced by” Austria.
According to Austria’s regulatory authority
E-Control, the new rules had been “known to all
market actors for months,” and said it expected
“all to confirm and take necessary measures to
fulfil their obligations.” The problems related
to “contractual details” concerning gas transit
towards Italy, the regulator said.

Week 40 06•October•2022 www. NEWSBASE .com P7