Gazprom Refused to Pump Gas Through Belarus

The key gas pipeline Yamal-Europe has been shut down since the end of last week.

Gazprom is in no hurry to increase gas supplies to the European Union after Russian President Vladimir Putin instructed the company to fill empty German storage facilities.

On Tuesday, the GSA Platform and Regional Booking Platform held another series of auctions for the reservation of pipeline capacities, and its results once again plunged the market into shivers.

For the first, second, and third quarters of 2022, Gazprom abandoned the capacity of the Yamal-Europe pipeline, which can annually pump 33 billion cubic meters to Germany from Western Siberia through Belarus and Poland, finanz.ru writes.

A key gas pipeline supplying Germany, launched in 1997, has been de facto shut down since the end of last week: gas is pumped back to Poland instead of the normal direction from East to West, while Berlin, Moscow, and Gazprom remain silent, making traders nervous.

The long-term contract with Poland for gas transit expired a year ago. Gazprom immediately booked capacity 12 months in advance - until September 2021. When these agreements also expired, the Russian company “took” only a third of the available volume for October and the same amount for November.

The reason Gazprom refrained from booking the Polish route is Nord Stream 2, Fitch senior manager Dmitry Marinchenko told Reuters.

He argues that Gazprom is probably betting that Nord Stream 2 will start working pretty soon, and when this happens, the Ukrainian transit route and Yamal-Europe will be used as balancing ones - that is, only when other pipes are already occupied. ...

Apparently, Gazprom is using gas from the Yamal-Europe pipeline to fill Nord Stream 2, says Ronald Smith, senior oil and gas analyst at BCS. But if NS2 is not approved soon, it may have to request more volumes on the Belarusian-Polish route.

The European gas market, which is waiting for the "valve" to turn, reacted nervously to the results of Gazprom's auctions.

December futures on the ICE exchange started the day at $ 821.3 per thousand cubic meters; by noon, prices had fallen by $ 70 (to 750 per thousand cubic meters), then jumped by $ 100, and closed the day at 853.5 (+8.5%).