Gazprom quizzed on high energy prices, EU’s Vestager says

File photo. European Commissioner for Competition Margrethe Vestager gives a press conference relating to Russian gas giant Gazprom at the EU Commission headquarters in Brussels, Belgium, 22 April 2015. [EPA/EFE/STEPHANIE LECOCQ]

The European Union’s anti-trust chief on Thursday (13 January) said she had asked gas companies including Gazprom about tight supplies after accusations the Russian giant was holding back extra production that could be released to lower soaring prices.

Margrethe Vestager, who is also the European Commission’s executive vice president, said the company had not ramped up supply to meet demand.

“It is thought provoking that a company in view of increasing demand limits supply. That is quite rare behaviour in the marketplace,” she said at a news conference.

She said energy prices were a very high priority for the European Commission.

“We have sent out questionnaires to a number of energy suppliers in this field. We have got a lot of responses but we are still waiting for others including Gazprom. We are eagerly awaiting the information from them in order to advance our analysis,” Vestager said.

On Thursday, a Gazprom official told Interfax news agency that the Russian gas company was in contact with the European Commission and has shared some of the data requested. The official did not elaborate.

Gazprom was put into the spotlight last year when the post-coronavirus economic recovery drove global demand, pushing up prices and power bills and leading to calls that gas companies offer extra volumes.

Gazprom and the Kremlin have repeatedly denied withholding gas supplies, saying that all firm and long-term obligations have been met. The Russian gas company is supplying gas above contracts when it sees requests, Gazprom has said.

The head of the International Energy Agency (IEA) Fatih Birol on Wednesday said Russia was contributing to an undersupply of natural gas to Europe, and noted that the situation was happening during a standoff between Moscow and the West over Ukraine.

“Wwe estimate that Russia could increase deliveries to Europe by at least one-third, or over 3 billion cubic metres per month. This equates to almost 10% of the EU Union’s average monthly gas consumption – and would be the equivalent of a new LNG tanker delivering a full cargo of natural gas to Europe every day. Together with the current high level of LNG inflow, this would provide significant relief to European gas markets”, Birol wrote.

Faced with a lengthy certification procedure of its controversial Nord Stream 2 gas pipeline, Russia tries to convey the message that once in function, the pipe will solve Europe’s problems.

Kremlin: Nord Stream 2 start will help cap gas prices in Europe

A rapid startup of the Nord Stream 2 gas pipeline from Russia to Germany could help calm record-high gas prices in Europe, Kremlin spokesman Dmitry Peskov told reporters, as Moscow awaits for regulatory clearance for gas flows to begin.

Gazprom’s Yamal-Europe pipeline, a gas export route that usually runs from Poland to Germany, switched flows eastbound on 21 December, as buyers preferred to lift gas from storage until after prices ease, traders have said.

The Yamal pipeline, which brings around one-sixth of Russia’s normal annual gas exports to Europe and Turkey, was working in reverse mode for the 24th day on Thursday. Gazprom is set to switch flows back to Germany at some point this month.

Hoping for cheaper gas to come, Europe reverses Russian link to tap storage

Gas traders are relying on stockpiles to supply European buyers and avoid paying near record-high prices, industry sources and market analysts said, explaining the unusual reverse in direction of flows through a major Russian pipeline.

The Dutch TTF front-month contract gas contract, a European benchmark, touched an all-time high of €184.95 per megawatt hour (MWh) on 21 December when the Yamal system reversed flows.

The contract started last year at €19.15 per MWh and was trading at €83.25 per MWh on Thursday.

(Edited by Georgi Gotev)

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