FINANCE

Moscow’s EU envoy called on Europe to mend ties to avoid a gas shortage


The Kremlin’s ambassador to the EU has called on Europe to improve relations with Moscow to avoid future gas shortages, but stressed that Russia has nothing to do with recent price increases.

Russia’s Permanent Representative to the EU, Vladimir Chizov, said he hoped the state-controlled exporter Gazprom would supply a centup of 5 percent of European gas demand, responding quickly to President Vladimir Putin’s order to adjust output.

Measures that will help curb skyrocketing wholesale prices could come “not later but sooner,” he said. Putin has given Gazprom some advice on how to be more flexible. And some think Gazprom will listen, “Chishov told the Financial Times.

While rejecting European lawmakers’ claims that Russia had a role in Europe’s gas crisis, Chizov said Europe’s choice to view Moscow as a geopolitical “adversary” did not help.

“The core of the matter is just a matter of words,” he said. “Change the opposition to music and things will be resolved easily. When the EU finds enough political will to do so, they will know where to find us.

Natural gas prices are rising in Europe, raising fears of a winter fuel crisis and jeopardizing the economic recovery.

At one point last week, spot gas prices reached nearly 10 times their level since the beginning of the year, when Putin hinted that Gazprom could increase supplies.

Chizov stressed that Moscow has no interest in raising gas prices. That doesn’t increase stability, he said. “People will start to look back from gas to coal, which some people are already doing.”

Record high prices and low reserves have frightened the EU government into fearing a winter shortage, with some member states urging Brussels to consider emergency remedies or new reforms. But Energy Commissioner Qadri Simson told the FT last week that the roots of the crisis were “not made here in Europe”.

Cold winters in Europe and Asia run out of gas in storage when economic recovery from the epidemic increases demand and reduces wind speeds in Europe this summer, reducing renewable energy production.

Russian officials say regulatory approval for the flow of gas through the disputed Nord Stream 2 pipeline in Germany will help resolve the crisis. Some analysts have suggested that Moscow is pushing up prices to force such results. The United States and many Eastern European states oppose the pipeline, which they say was designed to block gas transport through Ukraine.

The European Union’s own energy policy has exacerbated the bloc’s problems, and European energy companies are reluctant to pay more to replenish their reserves, Chishov said. “The problems that are occurring are artificially created. Mainly for political reasons, ”he said.

However, Klaus-Dieter Maubach, chief executive of the German gas company Uniper, a Gazprom client, suggested last week that supply was the problem. Unipar will be happy if Gazprom. . . It has provided more volume to cool the situation and bring down the price of gas, ”he said at a conference in Russia.

Vladimir Chishov, Russia’s Permanent Representative to the EU: “Change the partner of the opposition and the issues will be resolved easily”

Chishav added that the crisis was exacerbated by EU regulations that forced Gazprom to supply a proportion of freely traded gas to Europe on the condition of a spot market, rather than a long-term deal, which Brussels said was unreasonable.

“Long-term contracts … provide security of volume and price supply and stability. Then came the idea from Brussels that the system should be changed,” he said. “We know that market rules may be helpful in some situations but not quite helpful in others. “Something can change. And they’ve changed.”

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Gazprom is fulfilling its obligation to European customers in long-term supply agreements, but is reluctant to provide additional volume in the spot market, instead providing domestic Russian storage facilities. Chizov said that was because European energy companies were delaying additional purchases in the hope that prices would fall.

“If prices are free in the market, surely any power company in this part of Europe will think what is the best moment to order extra volume,” he said. “Serious buyers know exactly what’s going on. . . They have their own accounts. ”

But Chishav said he believes the commission, whose main renewable energy reform initiative aims to achieve passive zero emissions by 2050, “underestimates the future role of gas as a source of European energy.”

“Unless mankind finds a way to save energy, all those propellers and solar panels will not be a decisive factor,” he said.



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