Page 7 - FSUOGM Week 37 2022

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COMMENT
FSUOGM COMMENTARY FSUOGM
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overwhelming majority of its supplies are sent to comply with a Kremlin decree requiring them
Europe via pipeline and cannot be redirected to to pay for gas in rubles. And while Western
other markets save for the UK, which is not party sanctions have complicated the repair and
to the gas price cap talks. maintenance of equipment at the Nord Stream
Some countries heavily reliant on Russian 1 pipeline’s compressor station, reducing its flow
supply including Hungary, Slovakia and Aus- capacity, Moscow has said it will not reopen it
tria have warned that Russia could respond to a until sanctions are dropped, while state-owned
price cap by simply cutting off gas supply. Rus- Gazprom has chosen not to divert supplies to
sian President Vladimir Putin has indicated other supply routes such as Ukraine. Having
that Moscow would do just that, and also cease imposed its own sanctions on the operator of
deliveries of oil, coal and heating oil to boot. the Yamal-Europe pipeline that runs through
Only the Baltic States, which have been Belarus and Poland to Germany, Russia has
calling for harsher sanctions against Rus- effectively rendered that route unusable.
sia in recent months, fully backed the However, despite these cuts, the EU still
proposal. managed to reach its target of filling gas storage
Russian gas supply to Europe slumped to facilities to 80% of capacity in late August – over
a new low of 3.4bn cubic metres in August, two months ahead of schedule. And these stor-
down 7% month on month, and a further age facilities continue to be filled further, reach-
decline is anticipated in September in light of ing close to 84% of capacity as of September 10,
Nord Stream 1’s indefinite closure. Gazprom according to data published by Gas Infrastruc-
reported last week that its supply to the EU has ture Europe. Whether this will be enough to see
fallen by nearly half since the start of the year. the EU through winter in the event of a complete
These reductions in supply have largely been shutdown in Russian supply will depend on
political in nature. Gazprom has cut off deliver- temperatures and the effectiveness of the bloc’s
ies to several EU member states for refusing to efforts to curb consumption. ™

PIPELINES & TRANSPORT

Gazprom reports 39% slide in European gas

exports in Jan 1-Sept 15 period

EUROPE GAZPROM’S exports to Europe and Turkey year, Gazprom has nevertheless seen its revenues
were down 38.8% year on year between January soar on the back of soaring wholesale prices.
The decline has 1 and September 15, the company reported on its The company is currently delivering 84 mcm
accelerated since Telegram channel, with the accelerated decline per day of gas to Europe via Ukraine and Tur-
Gazprom indefinitely reflecting Gazprom’s closure of the Nord Stream key, compared with an average last year of 480
closed the Nord Stream 1 pipeline at the end of last month. mcm per year. In addition to Nord Stream 1, the
1 pipeline. Exports amounted to 84.8 bcm in the nine Yamal-Europe pipeline no longer flows gas west-
and a half months, down 53.7 bcm from the wards, as Gazprom has imposed sanctions on its
same period last year. Sales to the domestic mar- operator. Even so, at present prices, Gazprom has
ket were down 3.3%, while production dropped earned some $100bn this year on these exports,
15.9% to 300.8 bcm. up from $53bn last year.
Gazprom said that Europe lacked enough gas In line with statements in past updates this
in storage to guarantee reliable supplies this win- year, Gazprom noted that gas supplies to China
ter, even though storage facilities have already via the 38 bcm per year Power of Siberia pipeline
been filled to 85% of capacity, equivalent to 85 continued to grow. It noted that daily volumes
bcm of gas. were being supplied beyond the contractual vol-
Despite delivering far less gas to Europe this ume. ™

Week 37 15•September•2022 www. NEWSBASE .com P7