Who will benefit from Europe freezing in winter – Rossiyskaya Gazeta

by time news

In three weeks of November, Europe’s underground gas storage facilities (UGS) were empty by 7.2% from 83.4 billion to 77.4 billion cubic meters. Gas withdrawal accelerated, over the last two reporting days (November 22 and 23) – almost 1 billion cubic meters were pumped out of the UGS facility. Moreover, even in Northern Europe, the temperature is still above zero, and the real cold has not yet come. If gas offtake continues to grow, reserves in some countries may not be sufficient until the end of winter.

Trafigura CEO Jeremy Weir has already warned about the possibility of power outages in Europe this winter. It is one of the largest corporations in the world specializing in the exchange of commodities and electricity. Considering that the wholesale price of electricity in Europe increased several times in 2021 (depending on the country), and tariffs for the population increased by 15-30%, then consumers will hardly be delighted with such a quality of services that have greatly risen in price.

Until recently, there was still hope for the launch of Nord Stream 2, through which additional volumes of gas could be supplied to Europe, but after the suspension of the certification of the gas pipeline by the German regulator, it is not necessary to expect the start of its operation earlier than spring 2022. It was not possible to speed up the launch of Nord Stream 2 in the wake of rising gas prices, and now all circles of the European bureaucracy will have to go through all the circles of the European bureaucracy to put it into operation.

READ Also:  Paulo Coelho presented a new book - Rossiyskaya Gazeta

Gas continues to flow to Europe via all routes, including from Russia, but for the most part it does not reach UGS facilities. According to Gas Infrastructure Europe, for the same November 22 and 23, only about 40 million cubic meters were shipped to the storage facilities. But the problem is that European UGS facilities are filled unevenly.

“The most difficult situation with gas reserves in UGS facilities is in Austria (49.9% filled), the Netherlands (59.1%), Germany (68.9%) and Slovakia (67.4%),” says the deputy head of the National energy security Alexey Grivach. But in the EU countries for many years they have been building a single gas market and have adopted solidarity mechanisms at the legislative level, so a gas shortage, if it arises due to severe cold weather or force majeure from suppliers, will become a common European problem, he clarifies.

The situation is even worse in Ukraine, the storage capacity of which the Europeans use to store gas. Ukrainian UGS facilities are only 38.6% filled (about 11.9 billion cubic meters of gas). This is hardly enough for a normal winter. Last year, from December to April, the country needed 16.5 billion cubic meters. It will hardly be possible to buy some volumes of gas in Europe now, and if it does, it will be very expensive. Now the exchange price in Europe is about $ 1,100 per thousand cubic meters.

In this situation, it is often said that gas exporters, including Russia, benefit most from the shortage and rise in gas prices. But this is very far from the truth. Moreover, the prolongation of the gas crisis in Europe after the suspension of the certification of Nord Stream 2 was not at all in the interests of our country.

As noted by Grivach, Russia and other gas exporters are now receiving additional income, but the average price under long-term contracts is several times lower than the exchange spot prices (contracts implying fast delivery of goods and instant payment – RG). In his opinion, the main beneficiaries of this situation are traders (exchange trading participants – “RG”), who sell gas to end consumers under short-term contracts.

READ Also:  Usually a person writes a book. In our case, the opposite is true.

Against the background of sky-high exchange gas prices in Europe, there are more and more supporters of refusal to import energy resources. Gas is beginning to be perceived as an unreliable resource, the prices of which cannot be predicted. And this is not at all in the interests of its exporters, including Russia. There is even talk about the advantages of wind and solar energy over gas, although the crisis was largely provoked by the shortcomings of this type of generation. Therefore, Russia is not at all interested in the continuation of the European energy collapse. The negative consequences due to a decrease in gas demand in Europe in the future may turn out to be more significant than immediate benefits.

But this does not mean that our country should devote all efforts to filling European UGS facilities. Gas supply routes to Europe through Ukraine and Poland are economically less profitable for Russia than gas pipelines through the Baltic. In addition, the increase in gas pumping in these directions will feed the budgets of countries that are not the most friendly towards Russia.

Gazprom, of course, can load the Yamal-Europe gas pipeline and the Ukrainian gas transportation corridor to the maximum, however, real flows will also depend on the commercial conditions of transit, said Sergei Kapitonov, gas analyst at the Energy Center of the Moscow School of Management Skolkovo.

Deliveries along other routes may be increased, but in the event of a severe crisis, they will not solve the European problems, in which the European countries themselves are largely to blame, which created obstacles to the launch of Nord Stream 2, Grivach notes.

READ Also:  Martha Jungwirth, fulminant in Paris


You may also like

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.