Russian gas flow through the Yamal-Europe pipeline falls to zero – reports

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Russian natural gas flow through the Yamal-Europe pipeline on the Germany-Poland border fell to zero, Reuters reported on Tuesday.

Eastbound flows from Germany into Poland along the Yamal-Europe pipeline at the Mallnow border point stood at some 1,451 kWh/h by 1100 GMT but in the afternoon fell to zero, Reuters claimed, citing data from operator Gascade.

According to the TASS news agency, this may be due to equal gas flow deliveries in the direct and reverse modes. Gas via the Yamal-Europe usually moves westbound but when Polish customers buy gas from Germany, the pipeline reverses flow.

Gazprom booked some gas transit capacity via the Yamal-Europe pipeline for Wednesday, Interfax news agency reported citing auction results. However, the actual flows are not guaranteed because Gazprom does not always use booked capacity, Reuters said.

The agency added that Russian gas deliveries to Europe on the other two key pipeline routes – the Nord Stream and via the Ukrainian transit network – were broadly steady.

The Yamal-Europe gas pipeline passes through the territory of Russia, Belarus, Poland and Germany.

Russian energy major Gazprom said on Wednesday that gas deliveries to Europe through Ukraine are continuing as normal.

“Gazprom is supplying Russian gas for transit through the territory of Ukraine as normal in accordance with the orders placed by European consumers – that is 109.5 million cubic meters as of March 30,” company representative Sergey Kupriyanov said.

What happens if Russia turns off the gas taps to Europe

Deadline approaches for switching payments to rubles
What happens if Russia turns off the gas taps to Europe

Russia has given “hostile” countries a March 31 deadline to begin payments for natural gas imports in rubles. The new currency-switch rule will affect countries that imposed economic sanctions on the nation and froze its foreign currency reserves. This particularly concerns some EU countries that rely heavily on Russian energy supplies.

  1. What will happen after March 31?
    Russia says Europe will not get free gas if countries refuse to pay in rubles. “We are not going to supply gas for free, this is clear,” Kremlin spokesman Dmitry Peskov said on Tuesday. When asked whether gas would be turned off for non-payers, Peskov replied: “No payment, no gas.” He added, however, that Russia is yet to make a final decision on how to respond should European countries refuse to pay in the Russian currency.
  2. How much does Europe depend on Russian gas?
    Europe depends heavily on Russian gas for heating and power generation. Russian gas accounts for some 40% of Europe’s total consumption. The EU’s gas imports from Russia this year stood between €200 million and €800 million a day.
  3. What happens in Europe without Russian gas?
    The European Commission has said it plans to cut EU dependency on Russian gas by two-thirds this year and end its reliance on Russian supplies “well before 2030.” However, economists say it’s not easy to replace the 1,550 terawatt-hours of Russian gas delivered to the EU in 2021. Europe cannot replace the supply shortfall quickly; it will need to curb demand. Meanwhile, increased liquefied natural gas (LNG) imports in an already tight global LNG market would place immense upside pressure on prices. This would be a major hit to the European economy, which is already suffering from sky-high energy prices. A prolonged halt in supply of Russian gas would come at a cost for the EU and might even result in some countries that are more exposed to Russian gas fluctuations, like Italy and Germany, having to take emergency measures. German chancellor Olaf Scholz has warned that a ban on Russian energy imports would trigger an economic recession across Europe.
  4. What are the wider implications?
    There is a risk of a global energy crisis. Russia is the largest natural gas exporter in the world and the second-largest exporter of crude oil behind Saudi Arabia, according to the International Energy Agency. Replacing Russian gas will not be easy. Europe will have to buy gas on the open market, which means if they buy from countries like Qatar or the US they will have to pay more. It also means that the gas they buy will not go somewhere else. The result will be higher gas prices everywhere as countries outbid each other for limited supplies.
  5. Will oil prices be affected?
    Russia supplies around four million barrels of oil per day to the European Union. Unlike gas, the supply of which to a greater extent is still regulated by long-term contracts, the price of oil is volatile and is determined by supply and demand. If Europe still decides to abandon Russian oil, then crude prices could soar to $200 per barrel, or even higher, analysts warn.
  6. Will Russia sell other commodities in rubles?
    President Vladimir Putin has hinted during his payment plan announcement that natural gas could be the first Russian commodity to be sold in rubles. If the West imposes further sanctions, it raises the possibility that other Russian export commodities could be priced in rubles, including oil, metals, and grain.
  7. Who will blink first as the payment deadline approaches?
    So far, the EU and G7 nations have rejected Russia’s demand to switch their payments for gas to rubles. Russia said it will not provide free gas supplies, suggesting that it is ready to shut off the taps. If that happens Moscow would lose between €200 million to €800 million each day of the embargo. However, Russia could redirect some of the gas to Asia. Europe would likely face an economic crisis not seen since WWII, as soaring energy prices would send the region’s economies into recession. So, who will blink first? Place your bets.