Energy crises

Russia’s Gazprom said it is continuing to pipe natural gas to Europe via Ukraine.

The volume of gas flow at the Sunza metering station was recorded today at 42.3 million cubic meters.

Source: APPE-MPA

Ukraine has agreed to transit natural gas from Azerbaijan to Europe as an interim measure following the expiration of its transit agreement with Russia, although it expects that the quantities of gas from Azerbaijan will include quantities of Russian gas, the news website Ukrainska Pravda wrote today.

A recent energy market study reveals that, for the first time in nearly two years, the European Union imported more natural gas from Russia than from the United States during a single quarter, DPA reported.

Russia has alternative routes for supplies to European countries, Russian presidential spokesman Dmitry Peskov said on Aug. 28, commenting on the Ukrainian authorities' refusal to extend the agreement on Russian gas transit.

There are alternative routes, there are plans to create a hub in Türkiye, this work is in progress" Peskov said, TASS reported.

It's one of the more improbable aspects of Russia's invasion of Ukraine: Even after 2 1/2 years of war and repeated rounds of sanctions, Russian natural gas keeps flowing through Ukraine's pipeline network to customers in Europe.

Ukraine's attack on Russian soil, near an important transshipping point for Russian gas to Europe, has taken the uncertainty over the gas market up another notch, sending futures contracts up to new year-highs.

On Wednesday, September contracts shot up to 39.49 euros per megawatt-hour. By Thursday, the price had dropped slightly, to 38.62 euros per MWh.

Gazprom reported a record loss of 480.6 billion rubles (about 5.6 billion US dollars) for the first half of the year. This follows last year's annual loss of 629 billion rubles (approximately 6.9 billion dollars), the first in over two decades. In 2022, Gazprom had recorded a profit of 1.23 trillion rubles.

In May, natural gas imports to Europe from Russia surpassed those from the US for the first time since the onset of the Ukraine war, highlighting the EU's ongoing struggle to reduce reliance on Russian energy. Despite concerted efforts to cut ties with Russian fuels, one-off factors drove this shift, emphasizing the complexity of Europe's energy landscape, according to the Financial Times.

The implementation of the Vertical Gas Corridor has commenced, aimed at ensuring diversification and energy security for natural gas supplies. Bulgartransgaz, the state gas transmission operator, signed two critical public contracts with consortia comprising Bulgarian and American companies.

A comprehensive report commissioned by Gazprom, conducted by external analysts, reveals a bleak outlook for the company's future in Europe. The analysis indicates that Gazprom is unlikely to regain its pre-war export levels to Europe, its primary market, until at least 2035, if ever. The report, spanning 151 pages, was exclusively cited by the Financial Times.