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Russia Extends Gas Cutbacks To Europe As Gazprom Suspends Delivery To Dutch Traders.


31/05/2022


Russia Extends Gas Cutbacks To Europe As Gazprom Suspends Delivery To Dutch Traders.
On Tuesday, Russia expanded its gas cuts to Europe, with Gazprom cutting off supply to prominent Dutch trader GasTerra, deepening the economic struggle between Moscow and Brussels and driving up European gas prices. more info
 
The move comes just a day after Denmark signalled the end of its Russian gas supply and the European Union's biggest measure yet against Russia for its invasion of Ukraine, an agreement to suspend sea-borne imports of its oil. more info
 
GasTerra, which buys and trades gas on behalf of the Dutch government, said it has contracted for the 2 billion cubic metres (bcm) of gas it expected to receive from Gazprom through October elsewhere.
 
"This is not yet seen as a threat to supplies," said Economy Affairs Ministry spokesperson Pieter ten Bruggencate.
 
Orsted, a Danish corporation, warned on Monday that Gazprom Export may also suspend its delivery, but that such a decision would not immediately jeopardise Denmark's gas supplies.
 
The benchmark front-month gas contract climbed roughly 5 per cent on Tuesday morning to around 91 euros/MWh, but remained significantly below early March highs of over 300 euros/MWh.
 
"While the market was largely expecting both companies to be cut off, this development will make the supply-demand balance that much tighter," ICIS analyst Tom Marzec-Manser said on Twitter.
 
Russian gas deliveries to Germany via the Nord Stream pipeline dropped on Tuesday, according to analysts, owing to the cutoff to the Netherlands. more info
 
Moscow had previously cut off natural gas supplies to Bulgaria, Poland, and Finland due to their refusal to pay in Russian roubles, a demand made in response to Western sanctions that have isolated Russia, including the deactivation of the SWIFT international financial messaging system.
 
Gas supply shortages have pushed up already high gas prices, accelerating inflation and driving European governments and businesses to seek alternate supply and infrastructure, such as floating storage and regasification units (FSRUs).
 
Europe has been scrambling to fill its gas storage facilities in preparation for winter, fearful of supply disruptions from Russia, which generally delivers roughly 40 pper cent of Europe's gas.
 
According to Gas Infrastructure Europe data, Dutch gas storage is currently roughly 37 per cent full.
 
The Dutch government said last week that it would increase subsidies to 406 million euros in order to encourage companies to fill the Bergermeer facility, Europe's largest open-access gas storage facility.
 
On Monday, European Union leaders decided in principle to cut the EU's Russian oil imports by 90 percent by the end of the year, increasing pressure on Russia over its invasion of Ukraine, which Moscow describes as a "special military operation."
 
(Source:www.financialpost.com)