The French gas transportation company GRTGaz, a subsidiary of the main French supplier Engie, announced today, June 17, that France is no longer receiving Russian gas through pipelines. Pumping from Germany has been suspended since June 15.
“Since June 15, GRTgaz has recorded a halt in physical gas flows between France and Germany. These flows were about 60 gigawatt-hours per day at the beginning of 2022, only about 10% of the capacity,” GRTGaz said in a statement, quoted by Reuters.
In recent days, Gazprom has significantly reduced supplies to European countries, in particular to Germany, via the Nord Stream 1 gas pipeline, which could lead to the cessation of supplies to France.
However, GRTGaz urged consumers not to worry as the storage facilities in France are 56% full. The company confirmed its intention to continue filling them in preparation for winter. The decrease in flows from Germany is offset by an increase in imports from Spain and an increase in the capacity of LNG terminals, mostly methane. In April, President Emmanuel Macron said that France does not need Russian gas.
Gazprom is cutting gas supplies to Europe via Nord Stream due to problems with equipment. Germany believes that the reduction in supplies is not related to technical problems and is politically motivated. Against the backdrop of this news, gas prices in Europe are rising. On June 16, at the opening of trading, they exceeded $1,450 for the first time since the beginning of April.
Gazprom sales to EU declines
Gazprom’s CEO says he sees no problem with falling demand for its gas from Europe Union and will speed up the implementation of the eastern gas program in the near future, reports Kommersant. Speaking at SPIEF 2022, CEO Alexei Miller said Europe would have to fight for the supply of “golden” LNG with Asian buyers. Miller also said that he does not see a quick solution to the problems with the fall in supplies through the Nord Stream gas pipeline as Nord Stream 2 is ready to go.
The head of Gazprom devoted his keynote speech at SPIEF 2022 mainly to analysing the mistakes of his European clients and EU regulators. In particular, he separately mentioned the rejection of long-term gas contracts and the transition from formula pricing with oil pegging to exchange pricing.
“They did what they saw fit. One emperor once said – “If your opponent makes a mistake, do not prevent him from making it.” We warned that it was a very risky undertaking to refuse long-term contracts,” said Miller.
He said that Gazprom once received an order for the construction of the Nord Stream 2 gas pipeline, which, after direct sanctions from the United States, was frozen. At the same time, the pipe is now under pressure and ready for operation at any time. At the same time, the head of Gazprom does not see a solution to the problem of reducing supplies via Nord Stream, which the company reduced by 60% this week due to the need to bring Siemens gas compressor units for repairs.
“We were asked to build, huge funds have been invested – Nord Stream 2, two lines are under pressure, and gas can be delivered to Germany today. It is not launched because it is not certified. But then the question arises, how can one be trusted in terms of investing in large investment projects. And in general, there are more stringent definitions – this is discrimination against investors,” he said, adding that the result of such actions was the volatility of gas prices in Europe and high inflation. Gazprom announced that the company redirected the unclaimed capacity of one of the Nord Stream 2 lines for supplies to the northwest of Russia.
As for the decline in Gazprom’s deliveries to Europe, Alexey Miller was not concerned. He said there was a decrease in gas supplies to Europe by several tens of per cent. But he said the prices rose by several times more than the drop in supplies.
He said Gazprom, in the near future, will accelerate the implementation of the eastern gas program, which involves the construction of pipelines to transport gas to China.
On the Asian LNG, Miller said in the near future, the demand for LNG in the Asia-Pacific region would grow and significantly. By the second half of the year, European LNG importers will fight Chinese, Indian, Asian buyers for additional supplies of LNG.
For renewable energy in Europe, he said it is an attempt to get “one’s own resource at the expense of others. After all, their policy was aimed at making suppliers of traditional resources pay for this.”
In addition, RES requires 100% back-up from natural gas. “The depletion of resources is already a fait accompli, Europe is a net importer,” he said.