Wednesday, December 29, 2021
Russia stops gas supplies
That is what the conflict over the Yamal pipeline is all about
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With the onset of winter, tensions over gas supplies from Russia to Europe have flared up again. The focus is currently on the Yamal pipeline, which runs through Belarus and Poland to Germany. Against the background of geopolitical tensions and the conflict in Ukraine, the situation is highly complex.
Why is?
The Yamal pipeline, opened in 1994, connects the central Russian city of Torjok with Germany over a length of over 2000 kilometers. With 30 billion cubic meters per year, it transports a considerable part of Russian gas supplies to Europe. But since December 21, the pipeline has not been transporting gas in an east-west direction for reasons that are not clear.
In fact, gas is now being routed through the Yamal pipeline in the opposite direction from Germany to Poland, according to data from the operating company Gascade. Polish companies usually buy their gas – including Russian gas – from German suppliers. And these must continue to fulfill their contracts.
Why the delivery stop?
There is no straight answer here. The Polish government blamed Moscow for this: the Russian side had stopped deliveries. Russian President Vladimir Putin rejected this and instead accused Poland of “bypassing” Russia in the operation of the Yamal pipeline. The Russian energy giant Gazprom pointed to the lack of gas orders, especially from Germany and France. Germany would now supply Poland from its gas reserves.
George Zachmann, an energy specialist at Bruegel think tank in Brussels, suggested that Gazprom may also prefer pipelines in which it has major stakes. Around 50 percent of the operation of the Yamal pipeline is owned by the Russian company. In the question, the federal government only referred to the dealers and network operators. “We do not comment on individual deliveries and delivery routes, nor do we speculate on them,” said the Ministry of Economic Affairs on request.
What about security of supply?
This is “still guaranteed”, emphasized the Ministry of Economic Affairs. There are currently no signs of supply bottlenecks. “According to our information, the long-term supply contracts, including the Russian ones, will be adhered to and the long-term quantities of gas will arrive in Germany.”
But Germany has “relatively small reserves” and could soon have “difficulties”, says the chairman of the International Association for Energy Economics (IAEE), Christophe Bonnery. Accordingly, the gas reserves in Germany are only 53 percent full. “If the contracts are kept to a minimum, there will be no problems until March,” says Zachmann from the Bruegel think tank. However: “If Russia cannot or does not want to supply gas for technical reasons or for any other reason, then there could be supply bottlenecks.”
What does this mean for energy prices?
Whether the supply is secure or not, it is clear that the problems are contributing to the sharp rise in energy prices. Other reasons for this include a particularly cold winter and increased economic activity after the corona restrictions.
Moscow is suspected of taking advantage of world market tensions to reduce supply and drive prices up. Around 40 percent of Europe’s gas demand is covered by Russia.
Some experts see the procedure as an attempt to force the controversial Baltic Sea pipeline Nord Stream 2 to go into operation. The massive tensions on the Ukrainian border have also been causing disputes between Russia and the West for weeks.
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