FINANCE

The IEA has called on Russia to increase its gas supplies to Europe


Newsletter: Europe Express

The International Energy Agency has called for more gas to be sent to Europe to help Russia overcome the energy crisis, with Moscow, the first major international body to meet the demands of traders and foreign officials, limiting supplies.

The Paris-based group said Russia was supplying less gas to Europe before the coronavirus epidemic when it was fulfilling long-term agreements with European customers.

“The IEA believes that Russia can do more to increase the availability of gas in Europe and ensure adequate storage in preparation for the upcoming winter and summer season.”

“It is also an opportunity for Russia to present its credentials as a reliable supplier to the European market.”

Several members of the European Parliament have called for an investigation into Russia’s pipeline gas exporter state-backed monopoly Gazprom. Foreign officials and traders have questioned why the company has limited top-up sales in the spot market to Europe, saying it has raised prices that are raising household bills and threatening industry across the continent.

The company has destabilized energy traders by keeping Europe’s underground storage facilities stocked at lower levels than in previous years.

Gazprom chief executive Alexei Miller said last week that the company was meeting its supply obligations and was ready to increase production if needed. But he warned that prices could rise further in the winter due to a lack of underground facilities.

Gas prices rose again on Monday after Gasprom refused to book additional capacity for exports through Ukraine for October, and saved only one-third of the space available on the Yamal gas pipeline through Poland.

Russia wants to get approval to launch the Nord Stream 2 pipeline in Germany, a recently completed project that is partly controversial because it would point to rerecting some of the gas flowing through Ukraine, where Russia has been waging proxy war in the eastern border region since 2014.

Gazprom and Kremlin officials say Russia could increase gas sales if Germany and the EU allow the pipeline to be launched, raising doubts about limiting sales to speed up the decision.

The IEA, which was formed after the 1970 Arab oil embargo, has not only blamed Russia for the rise in prices. Strong demand for liquefied natural gas in Asia, which has removed cargo from Europe, has tightened global supply, it said.

It further said that blaming the rise of renewable energy for price rise was misguided. One of the reasons for the low wind speed in Europe this summer is the increase in gas demand.

“The recent rise in global natural gas prices is the result of multiple factors, and it is wrong and misleading to assume responsibility for clean energy conversion,” the IEA said.

Thierry Bross, a former oil and gas adviser to the French Ministry of Economy and professor of science at Poe in Paris, said the IEA “has been discussing the industry for some time but many European politicians were reluctant to talk about it – Russia’s role in the current energy crisis.” “

“In many ways it is returning to the IEA that it was originally set up to do – to ensure the security of supplies.”

European politicians are reluctant to blame Russia for the occasional rise in gas prices, which has more than tripled this year. However, some members of the European Parliament have called for an investigation into Gazprom’s role in the crisis.

The IEA has called on Russian President Vladimir Putin to consider allowing Russia’s state-owned oil company Rosneft to supply gas to Europe via the Nord Stream 2 pipeline.

In a recent report to Putin, Energy Minister Alexander Novak recommended that Rosneft be allowed to export 10 billion cubic meters a year to Europe through Gazprom’s export transit facility.

This year, Gazprom is less than the 139 BCM exported outside the former Soviet Union. However, it would mark a significant end to Gazprom’s monopoly on gas exports, which is more profitable than the domestic Russian market.

The Kremlin is keen to secure a long-term pipeline supply agreement with Europe through the Nord Stream 2, which it says will help bring down gas prices.

Both Rosneft and Gazprom are controlled by Putin’s longtime allies.

Rosneft chief executive Igor Sechin, who has lobbied for years to enter the gas export market, argued that allowing gas exports through Nord Stream 2 would help Russia generate more revenue from record gas prices. This is in line with the EU’s power rules that direct Gazprom to open a third party with half the power of Nord Stream 2.

Gasprom opposes the move, according to a report given to Putin, on the grounds that high gas prices are unlikely to rise until next year. The Russian newspaper Kommersant first briefed Putin on the contents of the briefing.

Rosneft and Gazprom declined to comment. Russia’s energy ministry declined to comment.

Amos Hutchstein, a senior State Department adviser on energy security, told the Financial Times earlier this month that he was concerned that parts of Europe were “at risk” in some parts of the world due to “severe winter supply” compared to Russia.

Twice weekly newsletter

Energy is the world’s most important business and Energy Source Hall’s newsletter. Every Tuesday and Thursday directly in your inbox, Energy Source brings you the news you need, forward-think analysis, and built-in intelligence. Register here.



Source link

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button