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Gazprom Halts Gas Shipments To Europe Via Critical Pipeline

Gazprom Halts Gas Shipments To Europe Via Critical Pipeline

After European nations imported the most gas from Russian sources yesterday in months, scrambling to stock up on supplies as Russian President Vladimir Putin’s deadline to either pay for gas in rubles (or be cut off) came and wentRussian gas giant Gazprom has officially halted all deliveries to Europe via the Yamal-Europe pipeline, a critical artery for European energy supplies.

Instead of flowing toward Germany and the EU, gas supplies on Friday and Saturday started flowing in the opposite direction, according to Gascade, the network operator.

In recent months, the EU has already boosted imports of LNG from the US…

…and despite President Biden’s promise to bolster to exports to the EU (although he stipulated that not all of this additional capacity would come from the US), researchers at Goldman Sachs have already shown that US exports of LNG are already at capacity.

Another problem for pipeline-dependent Europe: the continent presently doesn’t have the infrastructure to allow it to rapidly ramp up imports of LNG, which must be carefully processed and “regassified” before it can be distributed to utilities and other distributors of energy.

A map below illustrates the level of dependence that various European economies have on Russia.

“London wants to be the leader of everything anti-Russian. It even wants to be ahead of Washington! That’s the cost!” Peskov outlined.

Germany reveals when it will run out of gas

Germany reveals when it will run out of gas

Natural gas storage facilities in Germany are half-empty, economy ministry says
Germany reveals when it will run out of gas

Natural gas reserves in Germany, which has one of the highest underground gas storage capacities in Europe, have fallen to historically low levels compared with previous years.

“According to the consolidated register of gas storage facilities of the European association Gas Infrastructure Europe, Germany’s gas storage facilities are 50.6% full (as of January 11, 2022),” the German Ministry of Economy said in response to a deputy’s request as quoted by RIA. “This corresponds to a theoretical working gas availability of 17.7 days,” it added.

This comes as Russian energy giant Gazprom said on Monday it has not booked any capacity to pump gas to Europe through the Yamal pipeline next month. The Yamal-Europe pipeline, which usually delivers Russian gas west into Europe, continued to send it eastward from Germany to Poland for a 28th successive day on Monday, data from German network operator Gascade showed.

The route between Poland and Germany had been operating in reverse mode since December 21, putting upward pressure on European gas prices.

Economists are warning of energy price spikes deeper into the winter, saying that Europe is yet to find itself physically short of gas during the current gas year, which began in October.

Overall, European storage facilities were 49.33% full as of January 12, according to Gas Infrastructure Europe. If the current rate of withdrawal is sustained, Europe’s reserves could be fully depleted by the end of winter delivery, it said.

Gazprom Will Halt Gas Flows To Moldova In 48 Hours Over Non-Payment

Gazprom Will Halt Gas Flows To Moldova In 48 Hours Over Non-Payment

European natural gas prices could surge as new reports indicate Gazprom will halt all natural gas flows to Moldova, an Eastern European country, in 48 hours over non-payment for its gas consumption. The news follows Germany’s energy regulator, which suspended the approval process for the Nord Stream 2 pipeline last week. Russian President Vladimir Putin continues to exert pressure on Europe with declining gas flows amid the onset of the Northern Hemisphere winter.

The crux of the issue is that Moldova has yet to pay its energy bill to Gazprom. Today is the scheduled date of payment. Yet, there is no payment,” Sergey Kupriyanov, Gazprom board chairman’s spokesman, said in a statement, according to RT News. He said the company is extremely disappointed” in Moldova’s failure to fulfill its obligations on its recently extended energy contract.

Gazprom was expecting payment for Moldova’s gas usage on Monday (Nov. 22). This comes after Chisinau, the capital of Moldova, struck a 5-year deal with the gas producer on Nov. 1.

Kupriyanov said Gazprom attempted to set “market gas price” for Moldova but had to then take into account the “difficult economic and financial situation” in the country and Putin’s position. In the deal, he said most of Chisinau’s terms were reached, including a special discounted price.

Moldova was only to pay for its current consumption, the spokesman said, adding that Chisinau is in breach of contract, forcing Gazprom to suspend gas flows. The contract extension comes as Chisinau has mounting unpaid gas bills with Gazprom.

According to RT, before the Nov. 1 deal was signed, “Chisinau was close to introducing a state of emergency in case of failed talks. The tense situation also sparked some allegations that Moscow sought to exert pressure on Chisinau to break up its deal with the EU…

…click on the above link to read the rest of the article…

“No Extra Gas Booked” – European Gas Prices Surge After Putin Punks Freezing Continent

“No Extra Gas Booked” – European Gas Prices Surge After Putin Punks Freezing Continent

In late October, the market rejoiced and nat gas prices puked (even as we warned this was just the latest joke the Kremlin was playing at gullible Europe’s expense) after news that Russian President Vladimir Putin had asked Gazprom to “gradually” raise volumes to Europe starting November 8. So fast forwarding to November 8, i.e., today when not only is there no gas being shipped to Germany via Russia’s anchor Yamal pipeline as of today…

… but there are there no signs the continent will get any relief any time soon, with Gazprom moments ago tightening the proverbial (and literal) squeeze on Europe’s gas supply:

  • GAZPROM DIDN’T BOOK EXTRA GAS PIPELINE CAPACITY FOR TUESDAY
  • GAZPROM OPTS AGAINST SENDING MORE GAS TO EUROPE VIA UKRAINE
  • NO PIPE SPACE BOOKED TO SHIP EXTRA GAS INTO GERMANY’S MALLNOW.

Today’s squeeze follows a supply shock on Sunday, when no extra capacity to send additional supplies to Europe was booked in auctions. That’s a disappointment for traders who had been counting on Gazprom to follow Putin’s orders to ease the continent’s supply crunch.

Oops.

Natural gas prices have more than tripled this year as Europe started the heating season with the lowest inventories in more than a decade. Russia had been keeping supplies capped, but traders were hoping for relief after Putin ordered Gazprom to send more gas to Europe from Nov. 8, when domestic storage sites were set to be full. Meanwhile, after peaking above €160 then tumbling back to €60, Dutch nat gas futures have resumed their steady climb again as the prospect of a freezing European winter once again gets all too real.

…click on the above link to read the rest of the article…

After Rapid-Fire “Blame Putin” Headlines, European Commission Quietly Affirms Russia Is Not Manipulating Gas Market

After Rapid-Fire “Blame Putin” Headlines, European Commission Quietly Affirms Russia Is Not Manipulating Gas Market

Putin earlier this week batted down as “utter nonsense” widespread accusations among Western media pundits that Europe’s energy crisis is due to the Kremlin using gas as a ‘geopolitical weapon’.  It now appears the European Commission is quietly agreeing with him. This as Nord Stream 2, which Washington has long battled to stop, is awaiting final approval from German regulators begore going online.

As the Economist summarized of the ongoing accusations: “Russia is responding to a view gaining currency in European capitals that Gazprom, the state-controlled energy goliath that is the continent’s biggest supplier, has been stoking the continent’s energy crisis by withholding exports of natural gas. European parliamentarians are demanding that Gazprom be investigated for not shipping more gas, allegedly as a ploy to secure final regulatory approval for the controversial Nord Stream 2 pipeline designed to ship Russian gas to Germany.”

Image via New York Times

A somewhat exasperated Kremlin spokesman Dmitry Peskov last week noted Gazprom has fulfilled its current obligations to the maximum extent possible under existing contracts: “Nothing can be delivered beyond the contracts. How? For free? It is a matter of negotiating with Gazprom,” he said.

Of course, the somewhat sensational headline-grabbing accusations are what dominated press reports for much of the week, with new Friday comments from the European Commission getting buried. Vice President of the European Commission Frans Timmermans indicated there’s no reason to believe Russia is manipulating the market.

Timmermans bluntly said the following in an interview with Bulgarian broadcaster bTV:

“Russia is fulfilling its gas supply contracts.” He added that “we have no reason to believe it is putting pressure on the market or manipulating it.”

…click on the above link to read the rest of the article…

Kemp: Forget Russian Intentions, Fundamentals Drove Up Europe’s Gas Price

Kemp: Forget Russian Intentions, Fundamentals Drove Up Europe’s Gas Price

European policymakers and some traders blame Russia for the low volume of gas stored across the region which has sent both gas and electricity prices surging to record highs.

Russia’s pipeline gas export monopoly Gazprom has met commitments for long-term contracts, its clients confirm. But it has not raced to book extra pipeline capacity for spot buyers, despite European calls for more supplies.

Some policymakers and traders have speculated additional gas has been deliberately withheld to make a diplomatic point and accelerate the approval of the Nord Stream 2 pipeline. Others say Russia has withheld gas to create a shortage, drive up prices and increase export revenues, similar to the way the OPEC+ producer group raises oil prices and its revenues.

The other possibility is Russia has not supplied more gas because it faces its own shortage and wants to rebuild domestic stocks after they were depleted by a cold winter in 2020/21.

There is no empirical way to determine which theory is correct or what Russia’s intentions have been. But whatever the reason, the result is the same: gas is in short supply and European energy prices have hit record levels.

Escalating energy prices are a global phenomenon. Shortages of gas, coal, electricity and to a lesser extent oil are evident across North America and Asia as well as Europe. In every case, very high and rapidly rising prices this year are a reaction to very low and rapidly falling prices last year during the coronavirus-driven recession.

Energy prices have always been strongly cyclical. In this instance, an exceptionally severe cyclical slump in 2020 has produced an equally extreme cyclical upswing in 2021.

…click on the above link to read the rest of the article…

Gazprom Plant Connected To Russia-China Gas Pipeline Shuttered Due To Fire

Gazprom Plant Connected To Russia-China Gas Pipeline Shuttered Due To Fire

China’s energy crunch has resulted in power rationing in more than half of the provinces and affected the world’s biggest production base for electronic gadgets to semiconductors to appliances, among other things. Beijing has ordered energy firms to “secure supplies at all costs” as winter fast approaches to avoid shortages. But as we learn this morning, a Gazprom gas processing plant, connected to Russia’s sole gas pipeline to China, shuttered operations following a fire at the facility, according to Bloomberg.

Irina Dmitruk, the spokeswoman for the Gazprom unit, said the blaze at the Amur processing facility in eastern Siberia was extinguished around 0500 London time.

Bloomberg’s top energy analyst Javier Blas tweeted what appears to be a video of the fire at the processing plant. He said, “still unclear what’s the damage.”

However, Blas tweeted: “Gazprom is saying that the main equipment at the plant was not damage, and that gas exports toward China continue in line with requests.” Still, a full damage assessment report has not been released.

The Power of Siberia began operations in late 2019, before the Amur plant was launched. The facility processes natural gas from Gazprom’s Chayanda field and is used as feedstock for petrochemical production.

Instances like these outline the fragility of the fossil fuel industry. If processing or pipelines are shut down amid energy crunches in Europe and Asia, it would be absolutely devastating, considering both continents have very low stockpiles of fossil fuels ahead of the winter season.

Gazprom: We’re Not Withholding Gas To Europe

Gazprom: We’re Not Withholding Gas To Europe

Russian gas giant Gazprom dismisses speculation and accusations that it is not supplying enough natural gas via pipeline to Europe, a senior official at Gazprom Export says.

So far in 2021, Gazprom’s gas deliveries to Europe have reached historic highs, Sergey Komlev, Head of the Contract Structuring and Pricing Directorate at Gazprom Export, wrote in an article for Gazprom’s corporate magazine, as carried by Russian news agency TASS.

Germany, Turkey, and Italy—some of Gazprom’s largest customers—all boosted imports of Russian gas in the first half of 2021, the manager said.

Gazprom’s exports to European countries rose by 23.2 percent between January and July, Komlev added.

“These figures prove the absurdity of accusing Gazprom of supply shortage,” the executive noted.

Europe is grappling with soaring natural gas and electricity prices ahead of the winter heating season due to tight gas supplies, very low gas inventories, and low wind power generation amid still weather.

More than 40 members of the European Parliament from all political groups have reportedly urged the European Commission to launch an investigation into Gazprom over alleged market manipulation that could have contributed to the record-high natural gas prices in Europe.

During the summer, even with the strong rebound in European natural gas demand and surging prices, Gazprom did not book additional entry capacity to Europe via Ukraine.

Analysts say that this could have been an opportunistic move from the Russian giant to drive up Europe’s gas prices further and take advantage of the very high prices. Other analysts think that Gazprom’s effective reduction in supplies would force Europe to recognize that gas customers on the continent need the controversial Nord Stream 2 pipeline to Germany bypassing Ukraine.

…click on the above link to read the rest of the article…

German Ambassador Seconds Putin’s Fiery NS2 Remarks: “European Energy Policy Not Determined By Foreigners”

German Ambassador Seconds Putin’s Fiery NS2 Remarks: “European Energy Policy Not Determined By Foreigners”

The day after Putin announced the completion of the first leg of the Russia-to-Germany natural gas pipeline Nord Stream 2, declaring that essentially Washington’s best efforts to halt it via an avalanche of sanctions have been defeated, Germany appears to have seconded his assessment.

German Ambassador to Russia Geza Andreas von Geyr on Saturday in his own statements on the sidelines of the St. Petersburg International Economic Forum said that US efforts are illegal, going against international law. As cited in Russian media reports, the ambassador said: “At the moment, important negotiations between the American and German governments are ongoing, which include the topic of Nord Stream 2, but our stance on the matter is clear, and it will not change: we are convinced that the energy security of Europe, as well as European energy policy should be determined by Europeans only, and not by foreigners,” he stated confidently.

German Ambassador to Russia Geza Andreas von Geyr, Via FT

“As for the sanctions, our position is that such an instrument – extraterritorial sanctions – is not applicable, as it goes against international law“, he explained.

There’s nothing new in this position of Germany seeing in it a question of European sovereignty over its own energy policy. Both Russian and German sides have remain undeterred in completing the pipeline, yet interestingly it’s Washington’s position under Biden which appears to have softened and even reversed.

The Biden White House announced last month that it would waive sanctions for the German company overseeing its side of the 745-mile long pipeline project while at the same timing slapping more punitive measures on Russian vessels under Gazprom. Ostensibly an initiative to heal ties with Germany, it was clearly contradictory, as many observed…

…click on the above link to read the rest of the article…

Russian Vessel Enters German Waters For Last Leg Of Nord Stream 2 Pipelaying

Russian Vessel Enters German Waters For Last Leg Of Nord Stream 2 Pipelaying

Late last week the Biden administration slapped yet more sanctions on Russian entities, including 13 vessels and their owners, which are in the final stretch of laying the Russia to German natural gas pipeline Nord Stream 2 (said to be well over 90% complete). Just days prior the administration sent contradictory signals when it removed sanctions against the German overseer of the project Nord Stream 2 AG and CEO Matthias Warnig, in an attempt to mend relations with Berlin.

As expected, the conflicting actions has thwarted neither side of the project, as on Monday for the first time the Russian vessel Fortuna began laying pipes in German waters. While the Fortuna itself is under US sanctions, initially put in place under the Trump White House, Germany’s Waterway and Shipping Authority proudly confirmed that it’s begun work on this final section.

Via MarineTraffic.com

“All works are performed in accordance with the available permits,” Nord Stream 2 said a statement, according to Reuters“Fortuna will be working in German waters from May 22 to June 30, having earlier laid pipes in Denmark.”

On the Russian side state energy giant Gazprom has overseen the $11 billion dollar project, and months ago warned that should the US sanctions noose tighten further, the pipeline could see significant delays.

Germany has along with Russia fought back against Washington efforts to see the construction halted, long rejecting US punitive measures as interference in its domestic affairs, but with last Wednesday’s removal of sanctions for the German overseer of the project – this served to drastically ease tensions with Berlin over the matter, with German foreign minister Heiko Maas thanking the Biden administration for doing so.

…click on the above link to read the rest of the article…

Gazprom Blasts $7.6BN Polish Antitrust Fine On NS2 Pipeline As Move To Kill It “By All Means”

Polish authorities have fined Russia’s Gazprom a whopping and unprecedented $7.6 billion (or 6.5 billion euros) for constructing the controversial Nord Stream 2 pipeline to Germany.

While Poland anti-trust authorities have claimed Nord Stream 2 is fundamentally a politically motivated attempt to punish Polish consumers while increasing European dependence on on Russian imports, Germany has stood by the project even amid the Navalny poisoning affair which has strained its relations with Russia over the past month.

Poland’s Office of Competition and Consumer Protection decision seeks to legally force the six companies jointly building and financing the project to cancel their contracts, despite the gas pipeline being in its final phase of development. This includes European investors OMV, Wintershall, Engie, Shell and Uniper.

NS2 pipeline construction in the Baltic, file image.

“Carrying out the project is tantamount to breaking the rules of law and of fair competition that will lead to an increased dependence of gas recipients on the internal market on one supplier – Gazprom,” the Polish antitrust office said.

It charged that if allowed to go live it will result in “serious consequences for Poland’s and the EU’s economy,” by restricting the range of supplies while inevitably increasing gas prices for consumers.

But no doubt defenders of NS2 also see this as part of Washington’s broader war on the project, which has included past sanctions on executive heads of European companies involved, given recent deepening US military ties to Poland.

State-owned Gazprom, meanwhile has denounced the “unprecendented fine” as unlawful and unjustified. The fine’s “unprecedented amount evidences the decision to oppose implementation of the Nord Stream 2 project by all means,” the statement said, according to TASS.

…click on the above link to read the rest of the article…

The Race For Arctic Oil Is Heating Up

The Race For Arctic Oil Is Heating Up

Arctic LNG

Despite climate concerns and environmentalist backlash against exploration for oil and gas in pristine sensitive regions of the Arctic, companies continue to explore for hydrocarbon resources in the Arctic Circle, in Russia and Norway in particular.

The largest Russian energy companies are looking to explore more Arctic oil and gas resources on and offshore Russia, while Norwegian and other Western oil firms are digging exploration wells in Norway’s Barents Sea.

Those companies lead the development efforts to tap more Arctic oil and gas resources as legacy oil and gas fields both offshore Norway and onshore Russia mature.  

Russia’s biggest energy firms Gazprom, Rosneft, Novatek, and Lukoil, and Norway’s oil and gas giant Equinor, as well as Aker BP and ConocoPhillips, are the top oil and gas producers in the Artic region, data and analytics company GlobalData said in a new report. Gazprom is the undisputed leader in Arctic oil and gas production, followed, at a long distance, by two other Russian firms, Rosneft and Novatek, GlobalData’s estimates show.

Russian firms are ramping up exploration in Russia’s Arctic, while Equinor and other Western companies drill exploration wells in Norway’s Barents Sea, hoping for a significant discovery that could add to the Johan Castberg oilfield—a massive discovery which was made in 2011, but which hasn’t been replicated in the Barents Sea so far.  

Yet, both Russia and Norway face specific challenges in getting the most out of their respective Arctic oil and gas resources. 

In Russia, the government has made Arctic oil and gas development a key priority and offers tax breaks for firms exploring in the area.

…click on the above link to read the rest of the article…

Venezuela Orders PDVSA Offices Relocate To Moscow; Putin Affirms Support To “Friend” Maduro

Venezuela Orders PDVSA Offices Relocate To Moscow; Putin Affirms Support To “Friend” Maduro

A top Venezuelan official has announced that President Nicolas Maduro has ordered national oil and gas company PDVSA to close its current European headquarters in Lisbon, Portugal and move it to Moscow. The announcement came from Venezuelan Vice President Delcy Rodriguez during a press conference standing alongside Russian Foreign Minister Sergey Lavrov in Moscow on Friday. 

“President Nicolas Maduro instructed the Lisbon branch of PDVSA to close this office and relocate the office to Moscow,”Rodriguez said, according to Russia’s TASS news agency. It appears the relocation is already underway, and is part of the framework of “broadening cooperation” with Russian energy giants Rosneft and Gazprom, according to the statement.

Petróleos de Venezuela, S.A., PDVSA offices, via AFP

The Venezuelan vice president said, “This is done in line with our plans to expand technical cooperation in the oil production area with Rosneft, with Gazprom. The moment now is the most suitable to do so. We are changing the format of our relations.” And she added, “It’s the perfect time, as we are reshaping our relations.”

As part of the press briefing, Russian FM Lavrov conveyed President Putin’s words of support and solidarity to his “friend” President Maduro in a further clear sign that Moscow has dedicated itself to helping Venezuela’s state oil company weather the storm of US economic war and sanctions. 

Lavrov explained in the press conference, “Russia will further help the Venezuelan government to solve social and economic problems, which includes lending support via legitimate humanitarian aid.”

This after what’s been widely acknowledged as failed US-led coup efforts over the past weeks in support of opposition leader Juan Gaido, who has tried to rally support for greater external “pro-democracy” intervention against the Caracas government. As part of her remarks Rodriguez slammed what she called a US “operation” of “sabotage” against a “legal government” spearheaded by White House envoy to Venezuela Elliott Abrams.

 …click on the above link to read the rest of the article…

This Is Just The Beginning Of Europe’s Gas War

This Is Just The Beginning Of Europe’s Gas War

Globe

In a move that should not surprise energy pundits nor even those that follow geopolitical news in Europe, on Thursday Russian gas giant Gazprom said it’s looking to gain an even larger gas market share in Europe following record-high 2018 exports, as it expects a decline in Europe’s gas output combined with rising demand. Last year Gazprom sold more than 200 billion cubic meters (bcm) of natural gas to Europe, including Turkey, while its gas market share in the region rose to more than a third, Reuters said in a report on the matter.

Elena Burmistrova, in charge of the Gazprom’s exports, said the company would be able to offset a production decline in the EU, mainly at the Netherlands’ Groningen, once Europe’s largest natural gas field. “North Sea production is also gradually declining … So, the space for Russian gas is being freed up,” she said on the sidelines of the European Gas conference in Vienna.

Future gas wars

Gazprom’s statement comes as EU gas production is projected to spiral downward over the next 12 years. Regardless of possible development of non-traditional gas resources, production will decline by 43% against the 2013 level, Russia’s National Energy Security Fund (NESF) said recently.  Moreover, the Paris-based International Energy Agency (IEA) forecasts that EU gas production will halve by 2040.

This dwindling production also comes as a number of EU states are poised to break away from over-reliance on both nuclear and coal needed for power generation, leaving opportunities for renewables, particularly solar and wind power, as well as liquefied natural gas (LNG) imports. However, all of these sources will take more time and funding to develop before they can add a more significant percentage of the bloc’s energy mix going forward.

 …click on the above link to read the rest of the article…

Russian South Stream 2.0 Comes Out of the Shadows

Russian South Stream 2.0 Comes Out of the Shadows

Russia and Turkey have announced that the two countries have reached significant progress in reviving the November 2014-shut down South Stream gas pipeline intended to land Russian gas across the Black Sea. The project is the part of the already secured open tender contracts for purchases of gas signed between Gazprom, Bulgaria, Serbia, Hungary, Slovakia and Austria.

Source: Kommersant

The new Black Sea gas pipeline Turkish Stream will run under sea from Krasnodar to a landing hubv just west of Istanbul. On November 19, presidents Vladimir Putin and Recep Tayyip Erdogan met in Istanbul to announce the completion of pipeline’s off-shore section.

Pipeline capacity is for 30 bullion cubic meters, bcm, although initial phase capacity will be closer to 17bcm (the first pipe). Currently, Gazprom supplies the above volume (30bcm) to Turkey (ca 16bcm), Bulgaria, Serbia, Slovakia, Hungary and Austria. Turkish market has been supplied via Blue Stream pipeline, and the other countries are supplied via Ukraine.

Based on reports from Russia’s Kommersant (https://www.kommersant.ru/doc/3806415), Gazprom has managed to achieve two feats:

  1. Gazprom has completed laying two (not one) pipes for Turkish Stream, one intended to supply Turkey and another, to supply Southern Europe,
  2. Gazprom secured tenders for purchases of gas from all EU states to be connected to the South Stream project (Bulgaria’s open tender closes in December 2018, but all other countries have already signed onto supply agreements).

Significantly, the tenders were secured in compliance with the EU Energy Directives. This means that Gazprom latest venture has addressed the main cause of the EU’s original objections to the same pipeline prior to 2014. In the case of open tenders process, Gazprom used exactly the same scheme to secure capacity orders for its Nord Stream 2 pipeline to Germany, Czech Republic and Slovakia back in 2017.

…click on the above link to read the rest of the article…

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