FINANCE

Putin has denied that Russia is restricting gas supplies to Europe


Vladimir Putin says Russia is meeting all requests for gas supplies from Europe, vehemently denying that the state-run monopoly is limiting supplies to the continent in order to raise gas prices.

The Russian president said at an energy conference in Moscow that allegations that Gazprom was using force as a “weapon” to expedite the approval of the recently built Nord Stream 2 pipeline in Germany were “politically motivated”. He said the company had already exceeded its contractual obligations with the block.

“We are growing [supply] As much as our partners want. None was denied. Not one, “Putin said.

Putin added that Russia aims to achieve carbon neutrality by 2060, underlining the Kremlin’s growing appreciation of the threat posed by climate change.

Russia, whose Arctic region is warming three times faster than the global average, has slowly begun to address the threat of climate change after years of questioning whether greenhouse gases are warming the planet.

But Putin added that natural gas, as well as hydrogen and ammonia, would play a larger role in the energy mix, meaning Russia would exploit its vast natural resource base.

Russia supplies 40 percent of Europe’s gas.

Putin raised gas prices last week, saying Russia was ready to intervene to stabilize the “speculation craze” in volatile energy markets. The country has limited sales of pipeline gas for export under long-term contracts this year, industry insiders say, contributing to lower levels of gas storage in Europe ahead of the winter months, when demand rose sharply.

Gas analysts point out that while Gazprom has fulfilled long-term contracts, it has allowed its own storage facilities in Europe to fall to lower levels, which has contributed to the power of supply.

Deputy Energy Minister Evgeny Grabchak told reporters on Wednesday that Gazprom would continue to meet household storage facilities until November 1, indicating that Russia is not in a hurry to return supplies to Europe.

European gas prices have fallen slightly since Putin’s remarks last week, but are still much better than in previous years. The benchmark contract for November delivery traded above ড 90 per megawatt-hour on Tuesday, more than 5.5 times the level a year earlier.

The International Energy Agency, which is primarily funded by OECD members, said last week that it believed Russia could increase exports to Europe by about 15 percent and called on Moscow to show it as a “reliable supplier”.

Putin indicated on Wednesday that there is no possibility of sending any additional gas to Europe in the short term, but argued that Russia has already acquired the ability to send exports under existing routes.

Instead of a favorable spot market mechanism by the EU, additional supplies will probably have to come from the new long-term pipeline agreement.

Putin said that bypassing Ukraine to supply gas to Germany, Nord Stream 2 would “significantly help ease tensions in the fuel market, and that it would affect prices if approved by German regulators.”

But he said it was stuck by the EU’s “red tape”, which included Gasprom’s exclusive surrender to Russian gas exports and the need to give third parties access to 50 percent of the pipeline.



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