Page 7 - FSUOGM Week 22 2022

FSUOGM PIPEINES & TRANSPORT FSUOGM

Gazprom supplies to Europe

slump in 5M 2022

RUSSIA RUSSIA’S Gazprom cut gas flows to Europe by to comply with the Kremlin’s March 31 decree,
27.6% year on year in the first five months of which requires that gas buyers in “unfriendly
Gazprom has cut supply 2022, the company reported on June 1, reflecting countries” that have supported sanctions must
to five EU members. its move to cut off supply to a number of states set up special accounts at Gazprombank, where
that refused to comply with the Kremlin’s rubles- their euro and US dollar payments will be con-
for-gas decree. verted into rubles before onwards delivery to
The company’s exports to the so-called Far Gazprom.
Abroad, referring to countries in Europe plus Gazprom has also slashed supply to a
Turkey minus those in the former Soviet Union, number of private companies including Shell
amounted to 61bn cubic metres in January to Energy Europe, which had a contract for
May. The impact to Gazprom’s production level 1.2 bcm per year of deliveries to Germany.
was more modest, with output down only 4.8% On the other hand, various news reports
y/y at 211.4 bcm, according to the company’s claim that about half of the 54 companies in
estimates. Europe that have contracts with Gazprom
Gazprom halted gas supply to Poland and have opened accounts at Gazprombank to
Bulgaria at the end of April, and then end deliv- follow the Kremlin’s instruction, despite
eries to Finland and the Netherlands at the end calls by Brussels for solidarity in rejecting
of last month, after all those countries refused the demand. ™

Gazprom intends to cut off gas

supply to Shell in Germany

RUSSIA RUSSIA’S Gazprom plans to cut off gas supply to comply with the decree.
Shell Energy Europe in Germany on June 1, after Shell announced it was withdrawing from
The company's the company’s refusal to comply with its demand Russia after Moscow began its invasion of
production is relatively for gas payments in rubles. Ukraine, although it is yet to finalise any deals on
unaffected. Under a Kremlin decree published at the end divestments or other share transfers. It faced crit-
of March, Gazprom’s customers in “unfriendly” icism in March for trading discounted Russian
countries must set up special accounts at Gaz- oil despite its commitment to leave the country,
prombank, where their payments will be con- but has since committed to phasing out all Rus-
verted to rubles before being transferred to sian trade.
Gazprom. The move is aimed at shielding Gaz- A number of companies have agreed to pay
prom’s receipts from potential future sanctions, for Russian gas in line with the decree, however,
and propping up demand for the ruble. including Germany’s Uniper.
Shell Energy Europe’s contract with Gazprom “Uniper pays in euros in accordance with the
Export covers up to 1.2bn cubic metres per year new payment mechanism,” the company said in
of gas supply delivered to Germany. emailed comments to Reuters this week. “The
“Gazprom Export notified Shell Energy first of these payments was made at the end of
Europe Ltd of the suspension of gas supplies May. Uniper is therefore acting in compliance
under this contract from June 1, 2022 until pay- with sanctions and can continue to ensure timely
ment is made in accordance with the procedure fulfilment of the contract." ™
established in the above-mentioned decree,”
Gazprom said.
Gazprom also confirmed it was halting
gas deliveries at the start of June to Denmark’s
Orsted because it had refused to pay in rubles
and to the Netherlands’ GasTerra for the same
reason. Gazprom earlier ended supplies to Bul-
garia, Finland and Poland for their refusal to

Week 22 02•June•2022 www. NEWSBASE .com P7