Gazprom Has Stopped Gas Pumping through the Yamal-Europe Gas Pipeline via Belarus

The volume of gas supplies to Germany unexpectedly collapsed by 40%.

Gazprom has sharply cut gas supplies to Western Europe by “shutting off the valve” on the Yamal-Europe pipeline, which pumps gas from the north of Western Siberia through Belarus and Poland to Germany.

The volume of pumping at the entrance to Germany through the Mallnow compressor station in the Frankfurt an der Oder region unexpectedly collapsed by 40%.

From 84 million cubic meters per day last Friday, July 30, supplies fell to about 50 million on Saturday.

On Sunday, pumping rose to 60-65 million cubic meters per day, after which it fell again to 55 million on Monday.

Tuesday brought a new cut in volumes to below 50 million cubic meters per day. As a result, the injection of gas into the already half-empty European storage facilities actually stopped, Interfax reports, citing data from Gas Infrastructure Europe.

The filling of UGS facilities in Bergermeer in the Netherlands and Rehden in Germany has completely stopped, and gas withdrawal from the Haidach storage facility in Austria has completely stopped.

The cold winter of 2020 "burned" 61 billion cubic meters from European storage facilities, but their filling this summer stalls amid a 20 percent drop in LNG imports, unscheduled repairs at Norway's largest field Troll, and Gazprom's refusal to increase pumping through Poland and Ukraine.

On Monday, during another auction for reservations on the GSA platform, Gazprom refused additional capacity in the pipeline Yamal-Europe for the fourth quarter of this year and three quarters of next year in the amount of 89 million cubic meters per day.

The refusal of Gazprom also ended the auction for the additional capacity of the Ukrainian gas transmission system in the amount of 8.9 million cubic meters per day for the fourth quarter.

A sharp cut in supplies through the key pipeline that has supplied Germany with gas since the early 2000s has caught gas traders by surprise and has prompted some power producers to consider switching to coal, Bloomberg writes.

As of 2 August, European UGS facilities were 57% full, which is 16 percentage points below the five-year average.

The market fears that Europe will meet the winter without gas reserves, analysts at NatGasIntel write: this accelerates prices, which are firmly entrenched in the spot market above $ 500 per thousand cubic meters.

Since the beginning of the year, gas in Europe has risen in price by 165%, and if compared with the minimum values of last year - more than 10 times. “Russia is determined to switch flows to Nord Stream 2 as soon as possible and avoids using more expensive routes through Ukraine and Poland. This pushes prices up as demand rises and storage capacity is emptied,” Schneider Electric analyst Balint Balas says.

Gazprom is putting pressure on European buyers, waiting for a key decision on Nord Stream 2, which at the moment is doomed to remain half empty: the third EU energy package prohibits one company from being both a gas supplier and a pipeline owner.

Gazprom's first attempt to obtain recognition of Nord Stream 2 AG as an "independent operator" failed: the Federal Grid Agency of Germany rejected the application, after which the Russian holding decided to sue the regulator and filed a lawsuit with the Dusseldorf Supreme Regional Court demanding to reconsider this decision. The court's verdict is expected by the end of the year.