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As the European Union hits a wall with its Russian oil embargo and backtracks on some sanctions, Russia has imposed its own sanctions on EuRoPol Gaz S.A., which owns the Polish portion of the Yamal-Europe natural gas pipeline.
The 2,000+ kilometer Yamal-Europe pipeline runs from Torzhok in Russia to Frankfurt, Germany, with the Polish section accounting for over 680 kilometers and housing five compressor stations.
In an official sanctions resolution published on Wednesday, the Russian government has now blocked any transactions with Polish EuRoPol Gaz or Gaz System, the Polish gas transmission system operator, in retaliation for Polish sanctions on Gazprom, Interfax reports.
Russia has also imposed sanctions on units of Gazprom Germania, Reuters reported.
The retaliatory move comes as Poland announces it will not renew its 10 bcm Yamal natural gas contract with Gazprom, which expires at the end of this year.
It also comes as Poland’s PGNiG Upstream Norway AS announces plans to produce an extra 0.5 billion cubic meters of natural gas from Norway operations in 2022 to make up for Yamal contract shortfalls after Russia cut off gas to Poland over refusal to pay in rubles.
This natural gas will be delivered through the Baltic Pipe, which is scheduled to come online in October this year.
Europe is growing increasingly uneasy over natural gas supplies, with Ukraine on Wednesday halting the flow of Russian gas through its transmission system, citing disruption from Russia’s occupying forces.
Russia’s new sanctions, which include a total of 30 entities, have increased momentum as the European Union stalls over plans for a Russian oil ban.
A vote on the embargo requires unanimous support, which is so far not forthcoming, with Hungary, in particular, maintaining staunch opposition. Hungary is now holding out for a hand-out in the form of hundreds of millions of dollars, which is said will be necessary to realize a full ban on Russian oil without economic devastation.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com