Posted Dec 26 2022 at 17:31Updated Dec 26. 2022 at 18:06
A step forward, a step back… Russia is currently sending contradictory signals. After threatening to lower oil production to protest against the European embargo on crude and price cap , Moscow says it is ready to resume gas deliveries via the Yamal pipeline. “The European market remains relevant as the gas shortage persists and we have the opportunity to resume supplies,” Deputy Prime Minister for Energy Alexander Novak told the official Tass news agency.
For him, the Yamal gas pipeline, which connects Russia to Poland and Germany, was stopped for “political reasons”. Shortly after the outbreak of war in Ukraine, as supplies to Europe began to dwindle, Gazprom ceased deliveries through Yamal. Then the Russian company demanded that Poland pay in rubles. What Warsaw had refused: the Polish government had then put an end to the contract which bound it to Gazprom.
At the end of August, the pipeline had been shut down for three days of maintenance, but had not been reactivated since. The flows were then reversed to allow Poland to be supplied from Germany.
These statements could indicate that the various measures taken against Russia and its hydrocarbon production are beginning to dry up its economy. So far, Moscow has relied on the liquefied natural gas (LNG) market to keep its exports high. More flexible, the transport by boat of this energy allows the country to diversify its customers. European imports of Russian LNG are said to have increased by 40% this year. France, the main importer of Russian LNG in Europe, even became its first customer in the world, ahead of Japan, in February and March. Between January and October, France imported 4.45 million tonnes, an increase of 52% in one year.
Russia has developed an ambitious program to increase its liquefaction capacities. By 2035, it hopes to be able to export 80 to 140 million tonnes per year, compared to 35 million today. The gas company Novatek still hopes to restart the Arctic LNG 2 project by the end of 2023, in which TotalEnergies has invested but which has been stopped since Western sanctions. A large part of Russian production could therefore now be liquefied and then shipped to international markets.
Stocks rise in Europe
The future of gas pipelines is more uncertain. To resume deliveries to Poland, Moscow will first have to soften its own sanctions against Warsaw. And on the Polish side, nothing says that we are ready to get supplies again from Russia, while we have largely diversified our sources this year.
In Europe, the pressure has eased in recent weeks, as temperatures have risen. Inventories were not really dented despite a first cold snap in December.
In Europe, the pressure has eased in recent weeks, as temperatures have risen. Inventories were not really dented despite a first cold snap in December. They have even begun to fill up again, now standing at an average of 83%. Germany, which had fallen to an occupancy rate of 87%, has thus risen in recent days to 88% (compared to 77% last year at the same time), Poland posted a record rate of 96% which placed in a position of strength.
Russia says it is ready to increase its gas deliveries to Europe