COPENHAGEN: Russia is reducing pure gas provides by way of pipelines to the Netherlands, and Denmark may very well be subsequent.
GasTerra BV mentioned shipments have been to cease yesterday after it rejected new cost phrases imposed by President Vladimir Putin. Gazprom PJSC confirmed the provision minimize.
Denmark’s Orsted A/S mentioned it was getting ready for a minimize as the corporate, greatest identified for its wind-power enterprise, refused to collapse.
Russia imposed new cost phrases on European firms, which embrace opening an account in rubles with Gazprombank. Traders have been intently watching cost disputes, with Gazprom having already stopped provides to Poland, Bulgaria and Finland consequently.
“GasTerra will not go along with Gazprom’s payment demands,” the corporate mentioned in an announcement on its web site. “This is because to do so would risk breaching sanctions imposed by the European Union (EU) and also because there are too many financial and operational risks associated with the required payment.”
European nations are cut up over how one can deal with Moscow’s demand, and utilities have responded to the problem otherwise.
Major patrons like Italy’s Eni SpA and Germany’s Uniper SE have mentioned they’ve discovered an answer to pay and anticipate provides to proceed.
Countries can nonetheless obtain Russian liquefied pure gas as Putin’s calls for for rubles coated solely provides from Gazprom.
They have all additionally mentioned that they will cope with out the gasoline utilizing options.
Still, worries over a possible provide crunch this (northern hemisphere) winter stay. Dutch gas futures for subsequent month, the European benchmark contract, reversed losses, gaining as a lot as 2.2% after the information of Gazprom’s minimize.
Prices have been later unchanged at about 86.9 (RM408) a megawatt-hour.
The halt in provides to GasTerra means about two billion cubic metres of gas received’t be delivered between now and Oct 1, when the corporate’s contract with the Russian vitality big was set to run out, the Dutch agency mentioned.
That’s simply over 1% of Russia’s complete provides to the European Union final 12 months.
“The European gas market is highly integrated and extensive,” GasTerra mentioned.
“However, it is impossible to predict how the lost supply of two billion cubic metres of Russian gas will affect the supply/demand situation and whether the European market can absorb this loss of supply without serious consequences.”
Orsted has a long-term contract for 20 terawatt-hours a 12 months, or about 1.9 billion cubic metres, with Gazprom that’s set to run out on the finish of the last decade.
While that’s only a fraction of the EU’s gas imports, it accounts for greater than 80% of the 24 terawatt hours of the gasoline that Denmark imported from Moscow in the identical interval.
Overall, Denmark’s gas imports make up a comparatively small portion of European demand in order that shouldn’t be too tough to supply available in the market, in response to BloombergNEF analyst Stefan Ulrich. Orsted had already mentioned it deliberate to purchase far lower than the utmost allowed by the contract.
Denmark and the Netherlands additionally depend on home manufacturing, however that’s been declining for years and isn’t sufficient to cowl consumption in full. — Bloomberg