Russia holds back gas supply to Europe amid pressure to approve Nord Stream

·2-min read
Russia has been pushing Europe to certify its new pipeline as soon as possible - Andrey Rudakov/Bloomberg
Russia has been pushing Europe to certify its new pipeline as soon as possible - Andrey Rudakov/Bloomberg

Russia opted against sending more gas to Europe, sending prices rocketing again as it put further pressure on Germany to sign off on its controversial new Nord Stream 2 pipeline.

Kremlin-controlled gas company Gazprom refrained from booking extra volumes for gas transit via Ukraine for next month at an auction that traders watched for signs of increased supply.

The news immediately sent wholesale gas prices in the UK and Europe 18 per cent higher.

It came shortly after Nord Stream 2 announced that the first of the project's two lines from Russia to Germany had been filled with technical gas and was ready to go, pending German approval.

The moves fuelled further speculation that Moscow is contributing to an ongoing gas supply crunch in order to force through approval of Nord Stream 2, which has split Europe and faced resistance from the United States.

Critics say the new pipeline is a way for Russia to punish Ukraine following a conflict that began in 2014. Ukraine is a major gas transit hub which would become obsolete once the pipeline is fully operational.

President Vladimir Putin last week said Russia stands by its commitments to send gas through Ukraine at least until 2024 but suggested that the shabby state of the pipeline could potentially cause disruptions.

Global gas prices hit record highs earlier this month as markets grappled with an unexpectedly high demand from recovering economies amid a limited supply of gas.

Russia's Gazprom, which is majority state-owned, on Monday indicated that it was prepared to help Europe out - but only on its terms.

The Russian gas monopolist said in a statement that the first branch of Nord Stream 2 has now been tested and is viable: “There is enough pressure in the pipeline to start gas transit in future.”

Russia has said it has limited capacity to respond to a growing demand for gas in Europe because its own domestic consumption is running at a record high due to unseasonably cold autumn weather.

Yuri Vitrenko, chief executive of Ukraine’s state-owned gas company Naftogaz, warned on Monday that the new pipeline carries “great risks for the security of Ukraine and security of the region.”

Naftogaz also asked Germany to let it take part in the certification for Nord Stream 2.

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting