Gazprom has started transporting gas to five storage facilities in Europe

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LAST UPDATE: 14.39

Gazprom has begun filling underground gas storage facilities (UGS) in Europe, the company said, according to the Russian news agency Ria Novosti.

“Gazprom has approved and launched a plan to transport gas to five European underground storage facilities for November. Volumes and routes for transporting gas have been determined,” Gazprom said in a statement, without specifying whether the process has started and in which countries are these facilities located.

It is noted that the company has previously completed the supply of storage facilities in Russia to ensure the uninterrupted supply of the domestic market in the winter, after which it is supposed to start increasing supplies at European facilities.

Gas prices also fell in late October when Russian President Vladimir Putin instructed Gazprom to increase deliveries to the European Union after Russian stockpiles were depleted.

Gazprom CEO Alexei Miller later clarified that the group was going to pay for Russian reserves before November 8.

According to Reuters, Russia supplies one-third of Europe’s gas and its intentions to increase supplies are critical at a time when rising prices have hit households and businesses in Europe, a sign of Europe’s heavy dependence. Europe from Moscow for its energy supply.

Although wholesale prices in the European Union and Britain have fallen, market analysts say a further drop in prices will depend on whether Russia does more to allay Europeans’ concerns and how cold it is. the winter.

“Until these concerns disappear, prices will remain high,” said Trevor Sikorski, an analyst at Energy Aspects.

Dmitry Marichenko, director of Fitch, estimates that Gazprom will have to inject about 170 million cubic meters a day for a month – an increase of one-third of current flow – to pay for European reserves.

“For such a serious increase in power supply, Gazprom will have to commit additional capacity through Ukraine – the Yamal-Europe and Nord Stream 1 pipelines are not enough,” said Dmitry Marichenko.

In Europe, gas reserves are at their lowest level due to the prolonged winter of 2020 and the subsequent non-recovery. Added to this is the lower efficiency of renewable energy sources, such as wind, for meteorological reasons.

According to Moscow, the European Union had in recent years preferred spot gas markets, which mean price fluctuations, instead of signing long-term, multi-year contracts with Gazprom.

Russia says it intends to send more gas, but wants to return to the practice of multiannual gas supply agreements.

Russia has denied allegations of deliberate withholding of supplies to Europe in order to put pressure on German regulators to approve gas shipments through the new Nord Stream 2 pipeline. Germany has until early January to approve the pipeline.

* Gazprom reduced gas supplies to the EU by 22% in the first ten months of 2021

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Source From: Capital

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