stock1 hour ago (30 Aug 2022) 11 56AM ET)
© Reuters. In this illustration taken on March 8, 2022, models of natural gas pipelines are seen in front of the colors of the European Union and Russia flags displayed. REUTERS/Dado Ruvic/Illustration
PARIS (Reuters) – France on Tuesday accused Moscow’s Gazprom (MCX: ) in Russia of cutting deliveries to major French customers and said it would close its main route to Germany this week. Three days after the gas pipeline, the energy supply was used as a “weapon of war”.
European governments are trying to coordinate responses to soaring energy costs for businesses and households and fill storage facilities ahead of peak winter demand.
Western countries worry that Moscow is deliberately raising gas prices in an attempt to undermine their opposition to an invasion of Ukraine, a tactic that Ukrainian President Volodymyr Zelensky called “economic terrorism”. Moscow denies the allegation.
Nord Stream 1, the main pipeline for Russian gas into Europe, has become the subject of controversy. Europe faces a further supply crunch this week as Gazprom shuts down pipelines for maintenance from Wednesday into the early hours of Saturday.
Kremlin spokesman Dmitry Peskov said on Tuesday that the only obstacle caused by Western sanctions against Russia was the supply of natural gas through Nord Stream 1, a technical issue.
But Agnes Pannier-Runacher, France’s Minister of Energy Transition, said: “It is very clear that Russia is using gas as a weapon of war and we have to prepare for the worst-case scenario of complete supply disruption. Get ready.”
In French utility Engie said gas from Gazprom will be reduced from Tuesday due to an unspecified contract dispute, she is accepting Interview with Radio France Internationale.
Russia has been pumping gas through Nord Stream 1 at just 20% capacity and there are fears this week’s outages could be extended.
Asked if there was any guarantee that Gazprom would restart the flow of gas through Nord Stream 1, the Kremlin’s Peskov said: “There are guarantees, except Technical problems caused by sanctions, nothing can hinder supply.”
EU ENERGY Ministers will hold an emergency meeting in September. 9 to discuss the crisis.
Germany, Europe’s largest economy, is open to discussing plans for a price cap on natural gas supplies at European level, a source in Italy said, citing a message from Germany’s economy minister to the EU. text messages from colleagues.
Sources say Robert Harbeck sent EU energy ministers a message that Berlin is willing to discuss
Italian Prime Minister Mario Draghi has been pushing for price caps and has called for measures to decouple the cost of electricity from gas prices. Such a move would allow European households to benefit from electricity produced from cheaper sources such as renewables.
Current price levels mean that demand for natural gas will drop in the long run, the chief executive of German energy company Wintershall Dea said on Tuesday.
“The prices we have right now are insane. Even gas producers don’t care because in the end, we’re going to massively destroy demand for our product,” Mario Mehren told reporters on the sidelines of a meeting in Norway.
Benchmark Dutch wholesale natural gas prices rose after an initial retreat on Tuesday afternoon. The front-month natural gas contract was up 1.5% at €271/MWh, off last week’s all-time high but still at more than five times its level a year ago.