Russia releases chilling footage of war games in Crimea
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The conflict over the Yamal-Europe pipeline, which usually delivers gas from Russia to Western Europe, continues. German network operator Gascade has today claimed Russia sent the fuel back to Poland for a sixth straight day – a huge blow to the EU, where gas prices have been skyrocketing.
Data showed that flows at the Mallnow metering point on the German-Polish border were today travelling east into Poland at an hourly volume of nearly 1.2 million kilowatt-hours (kWh/h).
They were expected to stay at these levels throughout the day.
The ownership of Gascade — part Russian, part German — suggests the issues are the result of a political feud.
Gascade is owned by WIGA, a joint venture of Gazprom and oil and gas company Wintershall DEA. Wintershall DEA is co-owned by German chemicals group BASF and Russian LetterOne.
However, Russia has this week denied accusations that the flow reversal was a political move, stating it was a purely commercial matter.
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On Thursday, President Vladimir Putin said Moscow was not to blame for Germany’s soaring gas prices.
He added the EU nation was reselling Russian gas to Poland and Ukraine rather than relieving an overheated market.
Germany receives Russian gas through various routes, including Yamal and the Nord Stream 1 pipeline.
The Yamal reverse has quickly and unsurprisingly seen Europe’s gas prices rocket to record highs, with a 90 percent increase registered since December 1, costing €180.27 (£152.42) per megawatt-hour (MW/h).
The move, of course, also rose prices in Britain, with energy bills expected to grow as much as 50 percent. However, the crisis is expected to be less of an issue than on the bloc.
Peter McNally, Global Lead for Industrials, Metals & Energy at Third Bridge, described this as largely a “EU problem”.
Mr McNally told Express.co.uk: “Germany was making itself too dependent on Russian gas, and the reality is that Europe needs more gas in the short-term and Russia is one of the options.”
The UK, meanwhile, gets the majority of its imports from Norway, making it less dependant on Russia.
Mr McNally argued: “Norway is a big source of the stuff [gas], and having a direct connection certainly benefits the UK.”
Two major German customers, in alignment with Mr Putin, have this week said Russian supplier Gazprom was meeting its contractual obligations.
The Kremlin has attributed the reversal to the EU’s failure to issue the relevant requests for gas.
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Mr Putin claimed: “Gazprom did not book this traffic as its customers, above all German and French companies, who buy gas via this [Yamal] route, did not put purchase requests forward.”
When Russia sees requests outside its long-term deals, Gazprom buys extra export capacity at auctions for delivery through the Yamal pipeline and Ukraine.
For the whole of December, however, Gazprom has not booked additional capacity for Yamal shipments.
Mr Putin claimed: “They turned this [Yamal] route into reverse from Germany to Poland… Why? Because we supply gas to Germany under long-term contracts and the price is three to four, [even] six to seven times cheaper than on spot. Just reselling 1 billion cubic metres (bcm) one can earn $1 billion.”
The Yamal reverse comes at a key time for the Nord Stream 2 pipeline, which Gazprom is filling under the Baltic Sea.
The plan is for the new pipeline, which does not pass through Ukraine, to start supplying gas to Europe at some point next year.
It also coincides with a moment of heightened tension between Russia and Ukraine – with the US, the EU and the Group of Seven warning Moscow they are ready to intervene with sanctions should they attack Kyiv.
Satellite images released this week by Maxar Technologies showed Russia has continued to build up troops in annexed Crimea and near Ukraine.
The Kremlin reiterated on Friday it reserves the right to move on Russian territory as it sees fit, and world leaders, backing Ukraine, have insisted “massive consequences” would follow any further escalation, including blocking the Nord Stream 2 pipeline.
Additional reporting by Jacob Paul
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