Exclusive: Gazprom Tells Europe Gas Stops Out of Its Control


Written by admin



View of the screen with the Gazprom logo at the St. Petersburg International Economic Forum (SPIEF) in St. Petersburg, Russia, June 17, 2022. REUTERS/Anton Vaganov/

Register now and get FREE unlimited access to

LONDON, July 18 (Reuters) – Russia’s Gazprom has told customers in Europe it cannot guarantee gas supplies due to “extraordinary” circumstances, according to a letter seen by Reuters. Moscow’s invasion of Ukraine.

A July 14 letter from the Russian state gas monopoly says it is declaring force majeure on supplies from June 14.

Force majeure, known as a natural disaster clause, is standard in business contracts and describes extraordinary circumstances that release a party from its legal obligations.

Register now and get FREE unlimited access to

Gazprom (GAZP.MM) did not comment immediately.

Uniper, Germany’s largest importer of Russian gas, was among the customers who said they received the letter and formally dismissed the claim as unfounded.

RWE (RWEG.DE), Germany’s largest electricity producer and another importer of Russian gas, also said it had received a force majeure notice.

“Please understand that we cannot comment on its details or our legal opinion,” the company said.

The trade source, who asked not to be identified due to the sensitivity of the matter, said the force majeure concerns supplies via the Nord Stream 1 pipeline, the main supply route to Germany and beyond.

Flows through the pipeline are zero as the canal is undergoing an annual maintenance that began on July 11 and is scheduled to end on Thursday. read more

Europe fears that Moscow may leave the pipeline mothballed in response to sanctions imposed on Russia over the war in Ukraine, exacerbating an energy crisis that could lead to a recession in the region.


As early as June 14, Gazprom reduced the throughput of the gas pipeline to 40%, citing the delay of the turbine, which is serviced in Canada by equipment supplier Siemens Energy (ENR1n.DE).

Canada shipped a turbine for the Nord Stream gas pipeline to Germany by plane on July 17 after repairs were completed, the Kommersant newspaper reported on Monday, citing sources familiar with the situation. read more

The report says that in the absence of problems with logistics and customs, the turbine will be delivered to Russia in another five to seven days.

The German economy ministry said on Monday it could not provide details of the turbine’s location.

But a ministry spokesman said it was a spare part that was only supposed to be used from September, meaning that its absence could not be the real reason for the drop in gas flow before maintenance.

“This sounds like the first hint that NS1 gas supplies may not resume after the end of the 10-day maintenance period,” said Hans van Cleef, senior energy economist at ABN Amro.

“Depending on what ‘extraordinary’ circumstances are in mind for declaring force majeure, and whether these issues are technical or more political, this could mean the next step in the escalation between Russia and Europe/Germany,” he added.

However, Austrian oil and gas group OMV (OMVV.VI) said on Monday that it expects gas supplies from Russia via the Nord Stream 1 gas pipeline to resume as planned after the shutdown. read more

Russian gas supplies via major routes, including through Ukraine and Belarus, as well as via Nord Stream 1 under the Baltic Sea, have been declining for several months now.

The European Union, which has imposed sanctions on Moscow, is aiming to end Russian fossil fuel use by 2027 but wants supplies to continue for now as it develops alternative sources.

For Moscow and Gazprom, energy flows are a vital source of revenue when Western sanctions over Russia’s invasion of Ukraine, which the Kremlin calls a “special military operation,” weigh heavily on Russian finances.

In the first half of the year, the federal budget received 6.4 trillion rubles ($115.32 billion) from oil and gas sales, according to the Russian Finance Ministry. This is compared to the planned 9.5 trillion rubles for the whole of 2022.

The grace period for payments on Gazprom’s two international bonds expires on July 19, and if payments to foreign creditors are not made by then, the company will technically be in default.

Register now and get FREE unlimited access to

Reporting by Julia Payne; additional reporting by Christoph Steitz in Frankfurt, Bozorg Sharafedin in London, written by Nina Chestney in London; Edited by David Goodman, Edmund Blair and Barbara Lewis.

Our Standards: Thomson Reuters Trust Principles.

#Exclusive #Gazprom #Tells #Europe #Gas #Stops #Control



About the author


Leave a Comment