Gas tango of cold winter | Latest news The Moscow Post
30 November 2023

Gas tango of cold winter

The European Union tries to introduce rules by which with her export gas pipelines it is offered to Russia to dance "the gas tango" alone, without contracts.

The Russian gas became almost main subject along with Ukraine and NATO. The U.S. Secretary of State Anthony Blinken even gathered representatives of power diggings to make sure that without the Russian natural gas it is necessary to Europe. In the U. S. Congress, attempts to stop "Nord Stream-2" continually break out.

The subject of the Russian gas became almost main in the agenda of Brussels. Some consider that Gazprom could export more. Others oppose growth of dependence on Russia. For ideologists of "green transition" carbon neutrality is as well a way to resist to domination of Gazprom, the correspondent of The Moscow Post reports.

But trade with Europe takes its course. Actions of gas monopoly for September-November of last year rose in price for 13%. Though Gazprom and Russian government in these dialogues of misunderstanding can't but test a condition of the growing isolation.

Fake from Birol

Business activity of Gazprom became a subject of attention of the International Energy Agency (IEA), "think-tank" of the Organization for Economic Cooperation and Development (OECD/the OECD). Fatih Birol, the director of MEA said that the deficiency in storages of the European Union considerably arose because of Gazprom though immediately I recognized that underground gas storages (UGS) of the Russian company in the territory of the EU make only 10% of total capacities of UGS of Europe.

Birol reproached the Russian state corporation that it allegedly "doesn't follow the instruction" Vladimir Putin. The President of Russia during the plenary session of the Russian power week really said that even during the most difficult periods of Cold War Russia delivered gas to Europe, fulfilling contractual obligations. It is ready and to do today everything that can, already exports more, than it is stated in contracts. I assured partners that there will be applications, there will be also a gas.

But it isn't enough and MEA looks for answers not in a jungle of regulatory creativity of eurocrats, and in geopolitics. Also notes: "today's low volume of supply of gas to Europe coincided with sharpening of tension around Ukraine". It is remarkable that the head of MEA made these estimates in phone call with the NATO Secretary General Jens Stoltenberg who became interested in gas supply of Europe too.

Gazprom insists: there is a contract, under it investment resources will be mobilized, production volumes which then are provided with the guaranteed gas offtake volumes are increased. UGS are difficult and expensive in operation, serve for alignment of seasonal and daily fluctuations of selection of fuel.

To Europe such approach not on temper. Brussels wants the competitive market where the prices are dictated by the buyer where gas flows from a pipe as water from the crane, according to the first requirement. As a result, plans of European Commission to approve these principles, having assumed as a basis the exchange, led to gas crisis. But Brussels refuses to recognize miscalculations. In these conditions Gazprom began to cause special irritation.

By this time conflict grains already sprouted. For example, in Poland taking the seventh most important place among importers of the Russian gas. Gazprom provided more than 60% of import requirements (9.9 billion cubic meters) until Warsaw decided to refuse this "dependence", to stop using possibilities of the 33 billion cubic meters Yamal — Europe gas pipeline in a year.

The PGNiG state company began to look for alternative sources of deliveries. By 2016 the 5 billion cubic meters reception LNG terminal was completed, long-term contracts with American "Cheniere" and Qatar "Qatargas" for LNG supply are signed further. There were plans to create the gas hub.

It was planned to replace the Russian gas also with deliveries on the sea gas pipeline "Baltic Pipe" with power about 10 billion cubic meters. PGNiG got fields on the continental shelf of Norway with a total potential of production about 2.5 billion cubic meters a year, but demands to come to these volumes time and considerable investments.

One of claims of Poland to Gazprom – the price. PGNiG always considered the cost of gas overestimated. In 2016 a claim was submitted to the Stockholm arbitration. In March, 2019 it was entrusted to experts to prepare "report" on the basis of which the new formula of the price appeared. As approves Gazprom, nobody asked tribunal to do it, but the arbitration exceeded authority, and in favor of Poland.

In November of the same year PGNiG transferred to Gazprom the notice of intention to stop purchases of the Russian gas upon termination of the contract signed in 1996. The term of his action comes to the end in the current year. In the relations of two companies the important place was taken by transit of gas to Germany, but the contract with Gazprom on transit ended in 2021. Warsaw lost an opportunity to be engaged in "a virtual reverse" which helped her feeling of decrease in dependence on Gazprom. Almost, as with Ukraine!

The Polish section of the pipeline by the end of December of last year was transferred to the reverse mode. The gas bought PGNiG in Germany went to Poland. One of three routes of supply of gas to Europe became for Russia kind of superfluous. In September, 2021 Poland achieved the right to participate in the solution of fate of the Nord Stream-2 gas pipeline, can be too in hope to make also this project stillborn.


In October, 2021 the chairman of the board of PGNIG concern Pavel Mayevsky accused Gazprom of increase in prices for gas in Europe. From the Polish state company the request arrived to reduce the price again, to reconsider terms of the contract. Motive not naive, not shameless: "unprecedented increase in prices in the European wholesale gas market".

According to the previous judgment on the claim of Poland, the price of the contract was tied to market indicators, untied" from oil on which I leaned earlier. Desire to gain led to losses. It didn't suit Poland again.

The Stockholm arbitration made on March 30, 2021 the decision on a price dispute in favor of Warsaw, "having rewritten" a price formula under the contract is retroactive from November, 2014 to 2017. I considered that Gazprom has to return an overpayment to 1.5 billion dollars. These means were paid, but the exporter promised to appeal against the decision.

In January of this year the Russian company itself went to arbitration and demanded to increase the prices under "The Yamal contract" from November, 2017. The next right of revision of the prices at it arose in November, 2020. The address was initiated by LLC Gazprom Export and PJSC Gazprom. It is clear, that PGNiG considered these requirements unreasonable, and its head Mayevsky called claims "power blackmail".

From sanctions before self-destruction one step

There are also overseas "strategic minds" which believe that Russia uses energy resources as geopolitical weapon. "Washington studies a situation", - the Secretary of State Anthony Blinken at a joint press conference with the Ukrainian Minister of Foreign Affairs Dmitry Kuleboy said.

According to Reuters agency, the U.S. Department of State held a meeting with the energy companies. The situation with import of natural gas to Europe in case of the conflict with Ukraine was considered by Russia. Received assessment: to find alternatives for Europe it won't turn out, reported the agency, referring to sources.

The American authorities also worked "18 scenarios" in case of escalation around Ukraine, Victoria Nuland reported in an interview of Financial Times of the Deputy Secretary of State of the USA. I noted that it will be possible to cause to Moscow "very acute pain", in case of "invasion". Americans can equate to it even a coup in Kiev if he suddenly occurs, or attempt of that.

The deputy chairman of European Commission (EC) Mrs. Margarita Vestager waits for the answer from Gazprom to a question of whether the company the actions could provoke sharp increase in prices for gas in Europe. As a part of EC she was already responsible for the antimonopoly policy. As the deputy chairman her is confused that Gazprom at increase in demand limits deliveries. "Such behavior can seldom be seen in the market", - the deputy chairman says.

It is remarkable that "behavior" of commercial structure became a subject of attention of eurocrats. If violations from any company are during the investigation revealed, Vestager says, the European Commission can impose a penalty. At the same time operations of the regulator or the authorities of Germany which on "a hook of certification" suspended the efficient "Nord Stream-2" filled with gas aren't discussed.

Also actions of the European Commission which created crisis by the market radicalism aren't discussed, having brought down habitual contractual arrangements. 

The deficiency way of solving the problem of gas with delay of years in thirty was called also by Fatih Birol. He having suggested to change normative documents of the EU. To operators of the gas market, the head of MEA says, it is advisable to instruct to support UGS stocks at least at the minimum level. But to build "public" UGS expensively. It was possible to resupply private operators earlier, being guided by contracts with Gazprom. But it is ridiculous to criticize decisions of EC to her deputy chairman, it is dangerous to hurry start of ready "Nord Stream-2" especially. Washington can indicate the place.

When the Birolks Ended

Deutsche Welle writes about the statements of the head of the IEA that in the West the gas and energy crisis is perceived as a product of Russia's actions. According to Birol, Gazprom has the technical ability to increase gas supplies to Europe by a third, but does not do so even in conditions of very high prices. Although it exceeds contractual obligations in relation to... to China. The fact that in 2021 the volume of supplies of Russian gas to Germany, Italy and Turkey was higher than the contractual obligations of Birol was silent.

I also forgot that the Russian company is ready for new contracts. He did not recall the certification of the Nord Stream-2 project. Not to mention Naftogaz's refusal to buy fuel directly, and not virtually, through Europe. This operator also managed to file a complaint against Gazprom for abuse of market position.

Alexander Novak, Deputy Prime Minister, and in the recent past, the Minister of Energy, responded to Birol's accusations against Gazprom. He said that the cause of the energy crisis in Europe is the long cold winter, growing needs in the context of economic recovery. And he added: "We can supply, we have huge resources, but any production is an investment project that takes time." For the project to pay off, a guaranteed market is needed, without this it is impossible to attract investment.

Fortunately, Hungary, Serbia, to some extent, and Moldova went along the path of concluding long-term contracts with Gazprom, guided by common sense and the example of Germany. But the European Union is still against it. Kiev is also indignant, not to mention Warsaw. In general, the "green transition," and with it Russian natural gas, stumble upon the "yellow flashing" on the border of Russia and the European Union.

It is understandable that the toxic political atmosphere in Europe adds to the feeling of "gas loneliness" not only to the leaders of Gazprom, but also to Russia as a whole.

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