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Russia Reluctant To Boost Gas Flows As Cold Snap Hits Europe

Natural gas exports from Russia via the Yamal-Europe pipeline will remain limited at the start of this week as true winter begins and Russia keeps more gas for domestic consumption, with maximum temperatures in Moscow dipping below zero.

Bloomberg reports that after booking limited transit space on the Yamal-Europe pipeline over the weekend, Russia has remained reluctant to boost volumes today, which will likely aggravate the already grave gas supply situation in Europe, which is also facing colder temperatures this week.

According to data from the Regional Booking Platform, bookings for Russian gas flows via the pipeline, which terminates in Germany, stood at 4 percent of its capacity. This compares with an average bookings level of 35 percent of capacity since the start of the month.

Russia has also not booked any capacity on the transit route via Ukraine for today. However, Gazprom has started refilling the gas storage facilities it manages in Europe, although slowly.

Meanwhile, the temperatures in several European countries are expected to fall below zero this week, which will put additional strain on already strained grids, with wind power output much lower than demand requires, and gas in storage depleting fast due to the seasonal peak in demand.

On top of this, France's EDF had to shut down two nuclear plans after an inspection revealed signs of corrosion on some reactors. These account for a tenth of the country's electricity output and will add to Europe's troubles.

The situation is deteriorating fast, and could end in blackouts. Last month, Trafigura's chief executive Jeremy Weir warned that rolling blackouts were a possibility because of the limited natural gas supplies on the continent.

"We haven't got enough gas at the moment quite frankly, we're not storing for the winter period. So hence there's a real concern that there's a potential if we have a cold winter that we could have rolling blackouts in Europe," Weir said.

By Irina Slav for Oilprice.com

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  • Lee James on December 20 2021 said:
    Under certain circumstances and excuses, oil and gas trading is too easily weaponized. It will especially happen when a single supplier provides more than half of the fuel supply.
  • George Doolittle on December 20 2021 said:
    I think massive Industrial demand is a real problem in Western Europe and not so much "it's cold in the Winter." There is obviously still massive industrial demand in the USA for natural gas as well which has driven up global prices for all fuels not just natural gas.

    US coal and steel is very much on sale going on lately of course there being only one export facility for US coal that i know of however. Also IBM and Tesla are leading the way in the deployment of "virtual power plants" or "VPP"(distributed grid) such as has been deployed by Tesla in Australia by way of example.

    No problems with electricity in South Korea by way of alternative example.
  • Mamdouh Salameh on December 20 2021 said:
    I am sure that everybody is aware of the proverbial saying that “charity starts at home”. Therefore, Russia isn’t going to ship all the extra gas supplies it has to the European Union (EU) countries. It must keep some for its own people as temperatures in Russia could dip much far below zero than in the EU.

    Furthermore, if the Europeans want Russia to provide them with more gas supplies, they should show some charitable spirit towards Russia. Russia has spent $9.0 bn on building Nord Stream 2 gas pipeline to be able to ship additional 55 billion cubic metres (bcm) to the EU countries so that they don’t shiver in winter. The least the Europeans can do is to show a reciprocal charitable spirit towards Russia by immediately certifying Nord Stream 2.

    The alternative is that they may continue to politicize energy and delay the certification of Nord Stream 2 and go and ask Ukraine to provide them with gas.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

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