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Graphic shows risong gas futures price and falling Russian energy supplies.


Gazprom cuts EU gas supplies

By Duncan Mil

October 7, 2021 - Gazprom has cut EU gas supplies through the Yamal-Europe pipeline, pushing prices at the Dutch TTF -- the premier trading hub for gas futures -- above €100 per megawatt hour.

On Wednesday, the European gas market soared with gas futures linked to spot prices at the Dutch TTF hub hitting €132.93 per megawatt hour. The rise came after the Russian gas giant Gazprom drastically reduced gas deliveries through the Yamal-Europe gas pipeline.

Kremlin-controlled Gazprom began to sharply reduce gas deliveries to Europe at the end of July, from more than 108 million cubic metres per day (MCM) to 58 MCM, and then cut the volume to 47 MCM following a fire at the gas treatment plant in Novy Urengoy.

Deliveries returned to average volumes – 93 million cubic meters per day – after the visit of German Chancellor Angela Merkel to Moscow at the end of August. But now, they have fallen again to one of their lowest values this year.

At the beginning of the October-March heating season, storage facilities have typically been filled to 72 per cent capacity on average over the last five years.

Last winter, gas storage fell due to strong demand, exacerbated by relatively weak renewables generation and strong underlying power demand.

On Wednesday, Russian Deputy Prime Minister Alexander Novak said that certification of the controversial Nord Stream 2 undersea gas pipeline, which expects clearance from the German regulator, the Bundesnetzagentur, could cool soaring European gas prices.

The Kremlin has said Gazprom is ready to pump more gas if needed.

PUBLISHED: 07/10/2021; STORY: Graphic News; PICTURES: Getty Images