Page 8 - FSUOGM Week 20 2022

FSUOGM PIPELINES & TRANSPORT FSUOGM

Russia gas flows to Europe via Ukraine

disrupted by war for the first time

EUROPE PART of Russian natural gas transit flows to Russia’s state-owned gas giant Gazprom
Europe via Ukraine were halted due to the war declined a proposal by GTSOU to switch the
Gas entering Ukraine on May 11, sending European gas prices spiking. transit route to an alternative entry point at
via the Sokhranivka gas Gas entering Ukraine via the Sokhranivka Sudzha, the newswire reports.
metering station was gas metering station were halted at 7am local The shutting down of the Sokhranivka pump-
halted on May 11. time, reports Bloomberg, after the territory that ing station is the first serious disruption of Rus-
the station stands on fell under Russian military sia’s gas transit business via Ukraine since the
control. The Gas Transmission System Operator war started on February 24.
of Ukraine (GTSOU) said late on May 10 that it Russian gas had been flowing via both entry
would turn the station off, as it no longer controls points normally despite the conflict, although
the station. most of the time at lower rates than the transit
As bne IntelliNews reported, despite the war deal envisaged.
raging in the country, the gas transit business has Sokhranivka (Sokhranovka in Russian) han-
continued unabated and indeed Gazprom has dles about a third of Russian gas flows entering
been exporting the maximum allowed volumes Ukraine. The rest passes through the Sudzha
via Ukraine – and paying Kyiv its transit fees station, which is further away from the occupied
under the terms of the deal signed in December territories in eastern Ukraine.
2019 – as Europe races to refill its storage tanks GTSOU said the Russian military presence
ahead of the coming winter. Russia has taken in the region was making it impossible to fulfil
control of some of the territory where pumping its obligations to transit gas via the pumping sta-
stations are located, but has been careful not to tion. GTSOU said it was closing the station due
destroy the pipelines or interfere in the transit to a force majeure and would not be liable for the
business. stoppage. Russia’s gas transit deal with Ukraine
There is a cluster of pumping stations around is a take-or-pay arrangement that means even if
the Donbas region, where many of the Russian Russia passes less gas through Ukraine’s system
gas pipelines enter into Ukrainian territory. than it has contractually paid for it still has to pay
While there have been calls for an immediate for the full contracted volumes.
embargo on Russian gas sales to Europe by many A Gazprom spokesman confirmed it had
countries, saying that European gas import- received notice from Ukraine, but it didn’t
ers are funding President Vladimir Putin’s war receive confirmation of force majeure, Bloomb-
machine, the irony is that Russia is sticking to erg reports.
the terms of its transit deal and continues to pay The amount of gas set to transit via Sudzha
Ukraine for gas transit to Europe and is itself on May 11 was 72mn cubic metres, higher
funding the Ukrainian war machine. than for the day before, but still well below the
Gas prices have quadrupled from average average for both stations combined the same
pre-war levels, according to reports, and prices day, according to GTSOU. Flows via Ukraine
rose a further 6.8% on the news, Bloomberg to Slovakia’s Velke Kapusany, the main transit
reports. Benchmark gas prices traded 2.9% route to Europe, are also set to fall by 18%, to
higher at €101.68 per MWh by 8:11 a.m. in their lowest since April 30 based on grid data,
Amsterdam on May 11. Bloomberg reports. ™

P8 www. NEWSBASE .com Week 20 18•May•2022