Russia widens gas cuts in Europe as Gazprom cuts supply from Dutch trader

A 3D printed gas pipeline is placed in front of the Gazprom logo displayed in this illustration taken February 8, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

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  • Gazprom says it cut gas supply to GasTerra
  • Russians cite refusal to pay in rubles
  • The Dane also on the lookout for a possible cut
  • Move one day after EU agrees to cut Russian oil imports
  • Gas prices in Europe increase by 5%

May 31 (Reuters) – Russia on Tuesday extended gas cuts to Europe with Gazprom (GAZP.MM) cutting off supply to the main Dutch trader GasTerra, intensifying the economic battle between Moscow and Brussels and driving up gas prices in Europe. Read more

The move comes a day after Denmark announced the potential end of its Russian gas supply and the European Union’s toughest action yet against Russia for its invasion of Ukraine, an agreement to stop the maritime imports of its oil. Read more

GasTerra, which buys and trades gas on behalf of the Dutch government, said it had contracted elsewhere for the 2 billion cubic meters (bcm) of gas it expected to receive from Gazprom until October.

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“This is not yet considered a threat to supply,” said economy ministry spokesman Pieter ten Bruggencate.

Danish company Orsted (ORSTED.CO) warned on Monday that Gazprom Export could also cut off its supply, but he also said such a move would not immediately endanger Denmark’s gas supply. Read more

The benchmark first-month gas contract rose around 5% on Tuesday morning to around 91 euros/MWh, but remained well below highs of over 300 euros/MWh reached in early March.

“While the market widely expected both companies to be cut, this development will make the balance between supply and demand all the tighter,” said ICIS analyst Tom Marzec- Manser on Twitter.

Russian gas flows to Germany via the Nord Stream pipeline fell on Tuesday, which analysts said was likely due to the cut to the Netherlands. Read more

Moscow had already halted natural gas deliveries to Bulgaria, Poland and Finland citing their refusal to pay in Russian rubles, a request made in response to Western sanctions that have isolated Russia including cutting it off from the international banking messaging system. SWIFT. Read more

Gas supply cuts have pushed up already high gas prices, fueling inflation and prompting European governments and companies to seek alternative supply and the infrastructure to manage it, including floating storage units and regasification (FSRU).

Europe has rushed to fill its gas storage sites to shore up supplies ahead of winter, wary of supply cuts from Russia, which typically supplies around 40% of Europe’s gas. Read more

Dutch gas storage is currently around 37% full, according to data from Gas Infrastructure Europe.

The Dutch government announced last week that it would increase subsidies to 406 million euros to encourage companies to fill the Bergermeer facility, one of the largest open-access gas storage facilities in Europe.

On Monday, European Union leaders agreed in principle to cut Russian oil imports from the EU by 90% by the end of the year, increasing pressure on Russia over its invasion of Ukraine. , which Moscow describes as a “special military operation”. Read more

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Reporting by Toby Sterling and Anthony Deutsch in Amsterdam; Jan Strupczewski and Philip Blenkinsop in Brussels; Stine Jacobsen in Copenhagen; Susanna Twidale in London; written by Jason Neely, edited by Carmel Crimmins

Our standards: The Thomson Reuters Trust Principles.

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