France blames Russia for gas supply as Nord Stream shutdown looms

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  • Gazprom cuts supply to French Engie on Tuesday
  • The Nord Stream 1 pipeline will be closed for three days for maintenance
  • EU energy ministers will meet urgently on September 9
  • Europe’s first-month gas contract hit all-time highs last week

PARIS, Aug 30 (Reuters) – France on Tuesday accused Moscow of using energy supplies as “a weapon of war” after Russia’s Gazprom (GAZP.MM) halted deliveries to a major French customer and announced that would close its main gas pipeline to Germany. for three days this week.

European governments are trying to coordinate a response to soaring energy costs for businesses and households and to fill storage facilities before winter demand peaks.

Western countries fear Moscow is deliberately raising gas prices in an attempt to weaken their opposition to its invasion of Ukraine, a tactic that Ukrainian President Volodymyr Zelenskiy on Monday called “economic terrorism”. Moscow denies the accusation.

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Nord Stream 1, the main conduit for Russian gas to Europe, has become a flashpoint in the dispute. Europe faces further pressure on supplies this week as Gazprom closes the pipeline for maintenance from Wednesday until the early hours of Saturday.

Kremlin spokesman Dmitry Peskov said on Tuesday that technological problems caused by Western sanctions against Russia were the only obstacles to gas supply via Nord Stream 1.

But France’s Energy Transition Minister Agnès Pannier-Runacher said: “Very clearly, Russia is using gas as a weapon of war and we have to prepare for the worst-case scenario of a complete disruption of supplies.”

She was speaking to France Inter radio after French utility Engie (ENGIE.PA) said it would receive less gas from Gazprom from Tuesday due to an unspecified contract dispute. Read more

Russia has been pumping gas through Nord Stream 1 at just 20% capacity and there are fears this week’s outage could be extended.

When asked if there were any guarantees that Gazprom would restart gas flows via Nord Stream 1, the Kremlin’s Peskov replied: “There are guarantees that, apart from the technological problems caused by the sanctions, nothing hinders supplies”. Read more

‘CRAZY PRICES’

EU energy ministers will hold an emergency meeting on September 9 to discuss the crisis.

Germany, Europe’s largest economy, is ready to discuss a system of price caps on gas supply at European level, an Italian source said, citing a text message that the German Minister of Health ‘Economy sent to his colleagues on the other side of the block. Read more

The source said Robert Habeck had sent a message to EU energy ministers signaling that Berlin was ready to discuss price caps at next week’s meeting.

Italian Prime Minister Mario Draghi pushed for a price cap and also called for measures to decouple the cost of electricity from the price of gas. Such a move would allow European households to take advantage of electricity generated from cheaper sources such as renewables.

The chief executive of German energy company Wintershall Dea said on Tuesday that current price levels meant gas demand would fall in the long term.

“The prices we have right now are insane. That’s not even what a gas producer is looking for, because ultimately we’re going to massively destroy demand for our product,” Mario Mehren told reporters on the sidelines. a conference in Norway.

Dutch wholesale benchmark gas prices rose on Tuesday afternoon after an initial decline. The first-month gas contract rose 1.5% to 271 euros/MWh, from all-time highs reached last week, but is still trading at levels more than five times higher than those seen a year ago. .

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Reporting by Dominique Vidalon and Richard Lough in Paris, Giuseppe Fonte in Rome, Federico Maccioni in Milan, Holger Hansen in Berlin, Susanna Twidale in London, Vera Eckert in Frankfurt and Nora Buli in Stavanger Writing by Keith Weir; edited by Jason Neely, Angus MacSwan and Gareth Jones

Our standards: The Thomson Reuters Trust Principles.

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