MILAN, Oct 1 (Reuters) – Italy’s Eni (ENI.MI) said it not would receive any of the gas it had requested from Russia’s Gazprom (GAZP.MM) for delivery on Saturday, but the firms said they were working to fix this.
Russian gas supplies through the Tarvisio entry point will be at zero for Oct. 1, Eni, the biggest importer of Russian gas in Italy, said in a statement on its website.
Moscow and several European countries, including Germany, have been at loggerheads over the supply of natural gas from Russia since the country’s invasion of Ukraine in February.
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The European Union says that Moscow is using the flow of gas needed for energy in the region as an economic weapon, something that Russia has consistently denied, blaming instead the impact of Western sanctions for any disruptions in supply.
Gazprom said in a statement on Telegram that the problem was the result of regulatory changes in Austria.
Russia’s state-owned energy giant said that gas transit through Austria had been suspended after the country’s grid operator refused to confirm transport nominations.
Austria’s gas grid operator was not immediately available for comment on Saturday to respond to Gazprom’s comments.
A spokesperson for Eni, however, said that Austria continued to receive gas on its border with Slovakia.
Italy has secured additional gas imports this year from alternative suppliers to make up for a fall in flows from Russia after the start of the war in Ukraine.
Russian gas now accounts for around 10% of Italian imports, down from around 40%, a source close to the matter said, while the share for Algeria and the Nordics has increased.
Elsewhere, Gazprom cut natural gas supplies to Moldova by around 30%, Vadim Ceban, director of gas firm Moldovagaz, said.
On Friday, Moldova’s deputy Prime Minister Andrei Spinu said Gazprom had warned it about the reduction.
Spinu said on Saturday that technical problems caused the reduction and Moldova would ask Gazprom to increase supplies.
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Reporting by Federico Maccioni and Francesca Landini in Milan, additional reporting by Mark Trevelyan in London, Michael Shields in Zurich and Alexander Tanas in Chisinau, editing by Gareth Jones, Kirsten Donovan and Alexander Smith
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TBILISI/LONDON, Sept 30 (Reuters) – Russia’s top spy said on Friday that Moscow had intelligence indicating that the West was behind what he said was a “terrorist act” against the Nord Stream gas pipelines under the Baltic Sea.
A sharp drop in pressure on both pipelines was registered on Sept. 26 and seismologists detected explosions, triggering a wave of speculation about who might have sabotaged one of Russia’s most important energy corridors.
The European Union said it suspected sabotage caused the damage to the Gazprom-led (GAZP.MM) Nord Stream 1 and 2 pipelines in Swedish and Danish waters. The White House has dismissed Russian allegations it was behind the incidents.
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“We have materials that point to a Western trace in the organisation and implementation of these terrorist acts,” Sergei Naryshkin, the director of Russia’s Foreign Intelligence Service (SVR), was shown telling reporters on state television.
The spy chief’s remarks are the most direct public accusation against the West from a senior Russian official. He did not say what evidence Russia had, but said the West was trying to obscure who carried out the attack.
“The West is doing everything to hide the true perpetrators and organizers of this international terrorist act,” Naryshkin said. The SVR is the direct successor to the once mighty First Chief Directorate of the Soviet-era KGB.
President Vladimir Putin on Thursday said the “unprecedented sabotage” against the Nord Stream gas pipelines was “an act of international terrorism.” read more
The Kremlin declined to comment on Naryshkin’s remarks but said there needed to be a thorough international investigation into the incidents.
Sweden’s energy minister said on Friday it was “very likely” that the attack on the pipelines was done on purpose by a state actor.
Since the ruptures were first detected earlier this week, officials in Moscow have hinted that the West, led by the U.S., could be behind the attack. On Thursday, Russian Foreign Ministry spokeswoman Maria Zakharova said Washington stood to gain from the pipelines being disrupted.
Neither Nord Stream 1 or 2 were in operation when the ruptures were discovered on Monday, but both contained gas. Nord Stream AG, the operator for the Nord Stream 1 pipeline, said it expects the gas leak to stop by Monday, but that it has not been able to access the area to assess the damage.
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Kremlin says damage to pipelines looks like ‘terrorism’
EU official says leaks change nature of Ukraine conflict
European officials say Russian ships seen nearby -CNN
MOSCOW/BRUSSELS, Sept 29 (Reuters) – Russia said on Thursday that leaks spewing gas into the Baltic Sea from pipelines to Germany appeared to be the result of state-sponsored “terrorism”, as an EU official said the incident had fundamentally changed the nature of the conflict in Ukraine.
The European Union is investigating the cause of the leaks in the Gazprom-led (GAZP.MM) Nord Stream 1 and 2 pipelines and has said it suspects sabotage was behind the damage off the coasts of Denmark and Sweden.
Four days after the leaks were first spotted, it remains unclear who might be behind any attack on the pipelines that Russia and European partners spent billions of dollars building.
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“This looks like an act of terrorism, possibly on a state level,” Kremlin spokesman Dmitry Peskov said, adding: “It is very difficult to imagine that such an act of a terrorism could have happened without the involvement of a state of some kind”.
Russia also said the United States stood to benefit, in a war of words with the West over who was responsible. Moscow has previously said the leaks occurred in territory that is “fully under the control” of U.S. intelligence agencies.
Russia’s Foreign Ministry spokeswoman Maria Zakharova told a news briefing Washington would be able to boost its liquefied natural gas (LNG) sales if the pipelines were put out of use.
But U.S. news channel CNN, citing three sources, reported that European security officials had observed Russian navy support ships and submarines not far from the leaks.
Asked to comment on the CNN report, Peskov said there had been a much larger NATO presence in the area.
Zakharova called for an EU investigation to be “objective”, and said Washington would have to “explain itself” – a reference to President Joe Biden’s comment in February that, if Russia invaded Ukraine, “there will no longer be a Nord Stream 2”.
The White House has dismissed Russian allegations that it was responsible for the damage to Nord Stream and Biden’s comments were referring to efforts at the time to secure certification to bring Nord Stream 2 into commercial use.
Leaks from the Nord Stream 1 pipeline are likely to be stopped on Monday, the pipeline’s operator told Reuters.
But the spokesperson for Nord Stream AG said it was not possible to give any forecasts for the pipeline’s future operation until the damage had been assessed.
A gas leak from Nord stream 1 is seen in the Swedish economic zone in the Baltic Sea in this picture taken from the Swedish Coast Guard aircraft on September 28, 2022. Swedish Coast Guard/Handout via TT News Agency/via REUTERS
Russia had halted deliveries via Nord Stream 1, saying Western sanctions had hampered operations.
While neither pipeline was supplying gas to Europe when the leaks were first detected, both had gas in them.
European leaders and Moscow say they can not rule out sabotage. Map of Nord Stream pipelines and locations of reported leaks
‘ROBUST RESPONSE’
EU leaders will discuss the ramifications of the damage next week at a summit in Prague, an EU official said.
“The strategic infrastructure in the entire EU has to be protected,” the EU official in Brussels said.
“This changes fundamentally the nature of the conflict as we have seen it so far, just like the mobilisation … and the possible annexation,” the EU official said, referring to Russia’s mobilising of more troops for the war and expectations President Vladimir Putin will annex Ukrainian regions.
Russia’s war with Ukraine and the resulting energy standoff between Moscow and Europe, which has left the EU scrambling to find alternative gas supplies, are set to dominate the EU summit on Oct. 7.
The European Union on Wednesday warned of a “robust and united response” should there be more attacks and stressed the need to protect its energy infrastructure, but EU officials have avoided pointing a figure directly at possible perpetrators.
Next week, EU leaders will discuss an eighth sanctions package on Russia which European Commission chief Ursula von der Leyen has proposed, including tighter trade restrictions, more blacklistings and an oil price cap for third countries.
The EU official said he expected the 27-nation bloc to agree parts of the sanctions package before the summit, such as the blacklisting of additional individuals and some of the trade restrictions with regard to steel and technology.
Other topics such as the oil price cap or the sanctioning of banks may not be solved before the summit, he added.
EU states need unanimity to impose sanctions and Hungary’s prime minister Viktor Orban has been a vocal critic, saying sanctions have “backfired”, driving up energy prices and dealing a blow to European economies.
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OSLO, Sept 29 (Reuters) – Sweden’s coast guard discovered a fourth gas leak on the damaged Nord Stream pipelines earlier this week, a spokesperson told the Svenska Dagbladet newspaper.
The European Union suspects sabotage was behind the gas leaks on the subsea Russian pipelines to Europe and has promised a “robust” response to any intentional disruption of its energy infrastructure.
“Two of these four are in Sweden’s exclusive economic zone,” coast guard spokesperson Jenny Larsson told the paper late on Wednesday. The other two breaches are in the Danish exclusive economic zone.
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The coast guard did not immediately respond to a Reuters request for comment on Thursday.
While neither pipeline was in use at the time of the suspected blasts, they were filled with gas that has been spewing out in the Baltic Sea since Monday’s ruptures.
The fourth leak was on the Nord Stream 2 pipeline, in close proximity to a larger hole found on the nearby Nord Stream 1, the Swedish coast guard said.
This week, Danish authorities reported one hole in each of the two pipeline sections in their waters.
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Reporting by Terje Solsvik; Editing by Stine Jacobsen and Clarence Fernandez
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Polish PM blames sabotage, without citing evidence
Russia say leaks threaten Europe’s energy security
Footage shows gas bubbles churning sea surface
Operator says damage to Nord Stream 1 ‘unprecedented’
Crisis over Russian gas has sent prices soaring
STOCKHOLM/COPENHAGEN, Sept 27 (Reuters) – Europe was investigating major leaks in two Russian pipelines that spewed gas into the Baltic Sea on Tuesday as Sweden launched a preliminary probe into possible sabotage to infrastructure at the centre of an energy standoff.
But it remained far from clear who might be behind any foul play, if proven, on the Nord Stream pipelines that Russia and European partners spent billions of dollars building.
“We have established a report and the crime classification is gross sabotage,” a Swedish national police spokesperson said.
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Poland’s prime minister blamed sabotage for the leaks, without citing evidence. The Danish premier said it could not be ruled out.
Russia, which slashed gas deliveries to Europe after the West imposed sanctions over Moscow’s invasion of Ukraine, also said sabotage was a possibility and that the leaks undermined the continent’s energy security.
A senior Ukrainian official, meanwhile, called the incident a Russian attack to destabilise Europe, without giving proof.
“We see clearly that it’s an act of sabotage, related to the next step of escalation of the situation in Ukraine,” Polish Prime Minister Mateusz Morawiecki said at the opening of a new pipeline between Norway and Poland.
Seismologists in Denmark and Sweden registered powerful blasts in the vicinity of the leaks on Monday, Sweden’s National Seismology Centre told public broadcaster SVT. German geological research centre GFZ also said a seismograph on the Danish island of Bornholm had twice recorded spikes on Monday.
The Nord Stream pipelines have been flashpoints in an escalating energy war between capitals in Europe and Moscow that has damaged major Western economies, sent gas prices soaring and sparked a hunt for alternative supplies.
Denmark’s armed forces on Tuesday released a video showing bubbles boiling up to the surface of the sea. The largest gas leak had caused a surface disturbance of well over 1 km (0.6 mile) in diameter, the armed forces said. read more
Sweden’s Maritime Authority issued a warning about two leaks in the Nord Stream 1 pipeline the day after a leak on the nearby Nord Stream 2 pipeline was discovered that prompted Denmark to restrict shipping and impose a small no fly zone.
European leaders and Moscow say they can not rule out sabotage. Map of Nord Stream pipelines and locations of reported leaks
‘RISK OF EXPLOSIONS’
The leaks were very large and it could take perhaps a week for gas to stop draining out of the Nord Stream 2 pipeline, the head of Denmark’s Energy Agency Kristoffer Bottzauw said.
Ships could lose buoyancy if they entered the area.
“The sea surface is full of methane, which means there is an increased risk of explosions in the area,” Bottzauw said.
Gas bubbles from the Nord Stream 2 leak reaching surface of the Baltic Sea in the area shows disturbance of well over one kilometre diameter near Bornholm, Denmark, September 27, 2022. Danish Defence Command/Handout via REUTERS
Danish Prime Minister Mette Frederiksen said sabotage could not be ruled out. “We are talking about three leaks with some distance between them, and that’s why it is hard to imagine that it is a coincidence,” she said.
Kremlin spokesperson Dmitry Peskov called it “very concerning news. Indeed, we are talking about some damage of an unclear nature to the pipeline in Denmark’s economic zone.” He said it affected the continent’s energy security.
Neither pipeline was pumping gas to Europe at the time the leaks were found amid the dispute over the war in Ukraine, but the incidents will scupper any remaining expectations that Europe could receive gas via Nord Stream 1 before winter.
Operator Nord Stream said the damage was “unprecedented”.
Both pipelines contained gas although they were not in operation.
Gazprom (GAZP.MM), the Kremlin-controlled company with a monopoly on Russian gas exports by pipeline, declined comment.
“There are some indications that it is deliberate damage,” said a European security source, while adding it was still too early to draw conclusions. “You have to ask: Who would profit?”
CUTTING SUPPLIES
Russia reduced gas supplies to Europe via Nord Stream 1 before suspending flows altogether in August, blaming Western sanctions for causing technical difficulties. European politicians say that was a pretext to stop supplying gas.
The new Nord Stream 2 pipeline had yet to enter commercial operations. The plan to use it to supply gas was scrapped by Germany days before Russia sent troops into Ukraine, in what Moscow calls a “special military operation”, in February.
“The multiple undersea leaks mean neither pipeline will likely deliver any gas to the EU over the coming winter, irrespective of political developments in the Ukraine war,” Eurasia Group wrote in a note.
European gas prices rose on the news, with the benchmark October Dutch price climbing almost 10% on Tuesday. Prices are still below this year’s peaks but remain more than 200% higher than in early September 2021.
Norway’s Petroleum Safety Authority (PSA) had urged oil companies on Monday to be vigilant about unidentified drones seen flying near Norwegian offshore oil and gas platforms, warning of possible attacks.
The Swedish Maritime Administration (SMA) said two leaks on Nord Stream 1, one in the Swedish economic zone and another in the Danish zone, were northeast of Denmark’s Bornholm.
“We are keeping extra watch to make sure no ship comes too close to the site,” an SMA spokesperson said.
The Danish authorities asked that the level of preparedness in Denmark’s power and gas sector be raised after the leaks, a step that would require heightened safety procedures for power installations and facilities.
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BERLIN, Sept 26 (Reuters) – The Danish authorities on Monday asked ships to steer clear of a five nautical mile radius off the island of Bornholm after a gas leak overnight from the defunct Russian-owned Nord Stream 2 pipeline drained into the Baltic Sea.
The German government said it was in contact with the Danish authorities and working with local law enforcement to find out what caused pressure in the pipeline to plummet suddenly. Denmark’s energy ministry declined to comment.
The pipeline has been one of the flashpoints in an escalating energy war between Europe and Moscow since Russia’s invasion of Ukraine in February that has pummelled major Western economies and sent gas prices soaring.
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“A leak today occurred on the Nord Stream 2 pipeline in the Danish area,” said Denmark’s energy agency in a statement.
Danish maritime authorities had issued a navigation warning and established a zone around the pipeline “as it is dangerous for ship traffic”, it added.
Nord Stream 2’s operator said pressure in the pipeline, which had contained some gas sealed inside despite never becoming operational, dropped from 105 to 7 bars overnight.
The pipeline, which was intended to double the volume of gas flowing from St. Petersburg under the Baltic Sea to Germany, had just been completed and filled with 300 million cubic metres of gas when Germany cancelled it days before the invasion.
“Overnight the Nord Stream 2 landfall dispatcher registered a rapid gas pressure drop on Line A of the Nord Stream 2 natural gas pipeline,” Nord Stream 2’s operator said in a statement.
“Investigation is ongoing.”
NO CLARITY
European countries have resisted Russian calls to allow the Nord Stream 2 pipeline to operate and accused Moscow of using energy as a weapon. Russia denies doing so and blames the West for gas shortages.
“We are currently in contact with the authorities concerned in order to clarify the situation. We still have no clarity about the causes and the exact facts,” said a statement from the German economy ministry.
The Swiss-based operator, which has legally been wound up, said it had informed all relevant authorities about the leak.
Russian gas exporter Gazprom (GAZP.MM) referred questions about the incident to the Nord Stream 2 operator.
Russia has cut off gas supplies to several countries and also halted flows through the Nord Stream 1 pipeline, blaming Western sanctions for hindering operations.
President Vladimir Putin in September chided the West for keeping Nord Stream 2 shut. read more
Monday’s gas leak happened a day before the ceremonial launch of the Baltic Pipe carrying gas from Norway to Poland.
The project is a centrepiece of Warsaw’s efforts to diversify from Russian gas. Danish Prime Minister Mette Frederiksen is due to travel to Poland on Tuesday to mark the occasion.
Nord Stream 2 was widely unpopular among Danish lawmakers and the country in 2017 passed a law which allowed it to ban the project from passing through its territorial waters on security grounds.
But Nord Stream 2 later changed the original route to steer it through Denmark’s exclusive economic zone, where this veto could not be applied.
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Reporting by Thomas Escritt, Christian Kraemer, Stine Jacobsen, Terje Solsvik, Marek Strzelecki and Matthias Williams; Writing by Matthias Williams; Editing by Andrea Ricci and Mark Potter
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Thomas Escritt
Thomson Reuters
Berlin correspondent who has investigated anti-vaxxers and COVID treatment practices, reported on refugee camps and covered warlords’ trials in The Hague. Earlier, he covered Eastern Europe for the Financial Times. He speaks Hungarian, German, French and Dutch.
Spain may shut energy-intensive industries at peak times
France prepares to send gas to Germany in October
Germany to sign LNG contracts in UAE
Berlin still working on Uniper bailout
BERLIN/LISBON, Sept 19 (Reuters) – Germany was pressing on Monday to secure liquefied natural gas contracts with Gulf producers and other European states outlined measures to conserve energy, with Russian flows running at severely reduced levels as winter approaches.
Berlin said it aimed to sign LNG contracts in the United Arab Emirates to supply terminals it is building, now that the vital Nord Stream 1 gas pipeline from Russia is shut, while Spain, France others outlined contingency planning to try to avoid power cuts. read more
“If everything goes well, savings in Germany are high and we have a bit of luck with the weather, we … have a chance at getting through the winter comfortably,” Economy Minister Robert Habeck said after a tour of a future LNG terminal in northern Germany. read more
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The sharp drop supplies from Russia, which previously supplied about 40% of the European Union’s gas needs, has left governments scrambling to find alternative energy resources and has prompted fears of possible power cuts and a recession.
Russia has blamed Western sanctions imposed on Moscow for its invasion of Ukraine for hampering pipeline deliveries. European politicians say Moscow is using energy as weapon.
Germany’s RWE (RWEG.DE) said it was “in good and constructive talks” with Qatar about LNG deliveries, before a planned visit by Chancellor Olaf Scholz to the Gulf. Ailing importer Uniper (UN01.DE) said it had not reached a deal yet.
Germany will also be able to count on gas flowing from France from around Oct. 10, the head of France’s CRE energy regulator said, following an announcement by President Emmanuel Macron that the two would help each other with energy supplies.
Although deliveries via the Nord Stream 1 have halted, Russian gas flows to Europe via Ukraine, although much reduced, have continued.
In France, CRE chief Emmanuelle Wargon said that if energy group EDF’s race to repair corrosion-hit nuclear reactors suffers delays, “exceptional” measures this winter could include localised electricity cuts. read more
“But there will be no gas cuts for households. Never,” she told franceinfo broadcaster.
‘DIFFICULT WINTER’
Across the Pyrenees, Spanish Industry Minister Reyes Maroto said obliging energy-intensive companies to close during consumption peaks was an option this winter if required.
The companies would be compensated financially, she said in an interview with Spanish news agency Europa Press, adding there was no need to impose such closures now.
And Finns were warned by national grid operator Fingrid that they should be prepared for power outages. read more
Reflecting the disruptions caused across the continent, Finnish power retailer Karhu Voima Oy said it had filed for bankruptcy due to a sharp rise in electricity prices.
Meanwhile in Germany, Habeck said Berlin will not let large gas importers like VNG become insolvent, while an economy ministry spokesperson said “focused” discussions on aid were ongoing with ailing importer Uniper (UN01.DE). read more
Pipes at the landfall facilities of the Nord Stream 1 gas pipeline are pictured in Lubmin, Germany, March 8, 2022. REUTERS/Hannibal Hanschke
The German economy is contracting already and will likely get worse over the winter months as gas consumption is cut or rationed, the country’s central bank said on Monday.
In Portugal, the government was blunt about its concerns.
“From one day to another, we may have a problem, such as not being supplied the volume of gas that is planned,” environment and energy minister Duarte Cordeiro said, adding that Portugal was working to diversify its supplies to boost energy security.
“Portugal has been preparing, like all of Europe, for what will be a difficult winter,” he said, urging the European Commission to move forward with plans for a joint EU gas purchasing platform and defining import prices. read more
NORD STREAM 1 REQUESTS
Russia, which had supplied about 40% of the European Union’s gas before its February invasion of Ukraine, has said it closed Nord Stream 1 because Western sanctions hindered operations. European politicians say that is a pretext and accuse Moscow of using energy as a weapon.
German buyers briefly reserved capacity on Monday to receive Russian gas via the Nord Stream 1 pipeline, once one of Europe’s major gas supply routes, for the first time since the line was shut three weeks ago. But they soon dropped the requests.
It was not immediately clear why buyers had submitted requests for capacity when Russia has given no indication since it shut the line that it would restart any time soon. read more
Meanwhile, Ukraine accused Russian forces of shelling near the Pivdennoukrainsk nuclear power plant in Ukraine’s southern Mykolaiv region. read more
Since its forces were driven out of Kharkiv, Russia has repeatedly fired at power plants, water infrastructure and other civilian targets in what Ukraine says is retaliation for defeats on the ground. Moscow denies deliberately targeting civilians. read more
‘GOING BACK IN TIME’
European gas storages are now 85.6% full, with stocks in Germany close to 90%, data from Gas Infrastructure Europe showed.
“Stocks are set to continue to be built further, supported by the finalisation of planned maintenance work and increasing Norwegian flows as of this week,” analysts at Energi Danmark said in a morning note.
Europe’s imports of thermal coal in 2022 could be the highest in at least four years, analysts said.
“Europe is going back in time,” Rodrigo Echeverri, head of research at Noble Resources, told a conference.
Oil prices fell by more than 2% on Monday, pressured by expectations of weaker global demand and by U.S. dollar strength ahead of a potentially large interest rate hike, though supply worries limited the decline. read more
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SAMARKAND, Uzbekistan, Sept 16 (Reuters) – President Vladimir Putin on Friday denied Russia had anything to do with Europe’s energy crisis, saying that if the European Union wanted more gas it should lift sanctions preventing the opening of the Nord Stream 2 pipeline.
Speaking to reporters after the Shanghai Cooperation Organisation summit in Uzbekistan, Putin blamed what he called “the green agenda” for the energy crisis, and insisted that Russia would fulfil its energy obligations.
“The bottom line is, if you have an urge, if it’s so hard for you, just lift the sanctions on Nord Stream 2, which is 55 billion cubic metres of gas per year, just push the button and everything will get going,” Putin said.
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Nord Stream 2, which lays on the bed of the Baltic Sea almost in parallel to Nord Stream 1, was built a year ago, but Germany decided not to proceed with it just days before Russia sent its troops into Ukraine on Feb. 24.
Russian President Vladimir Putin speaks during a news conference following the Shanghai Cooperation Organization (SCO) summit in Samarkand, Uzbekistan September 16, 2022. Sputnik/Sergey Bobylev/Pool via REUTERS
European gas prices more than doubled from the start of the year amid a decline in Russian supplies.
This year’s price surge has squeezed struggling already consumers and forced some industries to halt production.
Europe has accused Russia of weaponising energy supplies in retaliation for Western sanctions imposed on Moscow over its invasion of Ukraine. Russia says the West has launched an economic war and sanctions have hampered Nord Stream 1 pipeline operations.
Russia has cut off gas supplies to several countries, includingBulgaria and Poland, because they refused to pay in roubles rather than the currency of the contract.
Russian gas giant Gazprom (GAZP.MM) also said earlier this month the Nord Stream 1 pipeline, Europe’s major supply route, would remain shut as a turbine at a compressor station had an engine oil leak, sending wholesale gas prices soaring. read more
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Germany plans to expand lending to energy firms
EU securities watchdog mulling EU-wide measures
Commission to announce broader plans on Wednesday
BERLIN/FRANKFURT, Sept 13 (Reuters) – Germany will step up lending to energy firms at risk of being crushed by soaring gas prices, it said Tuesday, as Europe readied proposals to help households and industry cope with an energy crisis.
The European Commission will on Wednesday announce targets to cut electricity consumption and a revenue cap for non-gas fuelled plants. Energy ministers will hold an emergency meeting on Sept. 30 to discuss them. read more
Separately, the EU’s securities watchdog is considering measures to help energy firms struggling to meet rocketing collateral demands. Firms were caught out by surging prices after Russia cut gas supplies to Europe to counter Western sanctions following Moscow’s invasion of Ukraine. read more
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The crisis is weighing heavily on Europe’s economy, even before winter when industrial users could face rationing if gas reserves prove inadequate. Industry sentiment in the bloc’s economic powerhouse, Germany, has tumbled.
“Of course we knew, and we know, that our solidarity with Ukraine will have consequences,” German Chancellor Olaf Scholz said on Tuesday. He urged Germans to brace for a tough winter as its energy supply shifts from Russian gas. read more
Under pressure utilities are in line for further state aid.
Germany’s finance ministry wants to boost state loans for energy firms using facilities set up to offer relief during the COVID-19 pandemic, it said. The German cabinet is expected to approve draft legislation on Wednesday. The loan guarantees could amount to 67 billion euros ($68 billion). read more
Last week, VNG, one of Germany’s biggest importers of Russian natural gas, became the latest energy firm to ask the government for aid.
Uniper (UN01.DE), the country’s largest importer of Russian gas, was bailed out in July. It is weighing legal action in Sweden to claim billions of euros in compensation from Russia’s Gazprom (GAZP.MM), Reuters reported on Tuesday. read more
RAFT OF EU PROPOSALS
Companies may also benefit from an easing of regulations.
The European Securities and Markets Authority (ESMA) is “actively considering” whether any regulatory measures are necessary to help support energy firms, a spokesperson said on Monday. read more
ESMA regulates clearing houses in the EU, which in turn set minimum levels of collateral based on risks from markets and counterparties. Public intervention in this area is rare, especially after the global financial crisis over a decade ago led to tougher margin requirements.
A draft of the European Commission’s proposals, seen by Reuters, would cap at 180 euros per megawatt hour the price at which wind, solar and nuclear plants could sell their power in the 27-nation bloc. It would also force fossil fuel firms to share excess profits. read more
Governments would be required to use the cash to help consumers and companies facing sky-high energy bills.
EU officials said, however, that plans for emergency liquidity support for power firms facing soaring collateral needs were still being drafted, and would likely be published later than Wednesday.
NO GAS PRICE CAP
Diplomats say there is broad support for a revenue cap for non-gas generators, as well as plans to impose electricity demand cuts. But countries are split over other ideas – including a gas price cap.
The EU has also backed away from an earlier plan to impose a price cap on Russian gas. Countries including Hungary and Austria had opposed that idea in case Moscow retaliated by cutting off the supplies it still sends to the EU.
Meanwhile, investor sentiment in Germany deteriorated more than expected in September as concerns over its energy supply weighed on the outlook for Europe’s largest economy. read more
“The prospect of energy shortages in winter has made expectations even more negative for large parts of the German industry,” said Achim Wambach, president of the ZEW economic research institute.
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Countries resist EU proposal to cap Russian gas price
Broader support seen for cash aid to energy firms
Ministers to discuss windfall levy, electricity use cut
BRUSSELS, Sept 9 (Reuters) – European Union energy ministers were split on Friday over whether to cap Russian gas prices, as they met to work out steps to shield citizens and businesses from sky-high energy bills.
But ministers arriving for the emergency meeting indicated broad backing for moves to prevent power providers from being crushed by a liquidity crunch and several said it was urgent to decouple the price of gas from other cheaper energy sources.
Friday’s ministerial talks aim to whittle down options for further discussion, rather than reaching a final decision on ways to tackle a crisis fuelled by Russia’s invasion of Ukraine. But many said agreement and action needed to be swift.
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“We are in an energy war with Russia,” Czech Industry Minister Jozef Sikela said. “We have to send a clear signal that we would do whatever it takes to support our households, our economies.”
Energy bills, already surging as demand for gas recovered from the COVID-19 pandemic, have rocketed higher since the Ukraine war. As Russia has reduced gas deliveries to Europe following the imposition of Western sanctions, EU governments have scrambled to limit the resulting energy price shock.
An EU proposal to cap Russian gas prices has so far failed to win support from a majority of countries, with Russia threatening to completely cut off the dwindling supplies that have continued to flow if such a step is taken.
Baltic states are among those backing the idea, saying it would deprive Moscow of cash to fund military action in Ukraine.
“Russia has said if you want our gas, take down the sanctions. It is blackmail. We cannot back down, we have to be united, we have to have the political will to help Ukraine win,” Estonian Economic Affairs Minister Riina Sikkut said.
But central and eastern European states, many of them more reliant than others on Russian fuel, fear losing all their supplies, while some question whether a cap would have much impact on reducing prices when deliveries are so low.
“If price restrictions were to be imposed exclusively on Russian gas, that would evidently lead to an immediate cut-off in Russian gas supplies. It does not take a Nobel Prize to recognise that,” Hungarian Foreign Minister Peter Szijjarto said.
MARKET REFORMS
German Economy Minister Robert Habeck said EU ministers should give Brussels the green light to prepare legislation to decouple the gas price from the price consumers pay for power from other energy carriers.
The European Commission this week said it would propose a measure to claw back revenues from non-gas power generators and spend the cash on cutting consumer bills.
A draft of the Commission proposal, seen by Reuters, would cap at 200 euros ($201.74) per megawatt hour the revenues non-gas producer receive. It would apply to wind, nuclear and coal generators.
European power prices are typically set by gas plants, so the cap would aim to skim off excess profits made in recent months by non-gas producers that have lower running costs but have still been able to sell their power at soaring prices.
“The measures the Commission has recommended in taking some of those excess profits and recycling them back into the households makes sense,” Irish Environment Minister Eamon Ryan said.
But France, home to Europe’s biggest nuclear power fleet, questioned whether the same limit should be applied to all non-gas generators.
EU diplomats said governments broadly supported the EU’s proposal to offer emergency liquidity to power firms facing soaring collateral requirements, although the details of this have yet to be fleshed out.
Finland and Sweden have already offered billions of dollars in liquidity guarantees to power companies in a bid to prevent the cash squeeze from toppling firms.
The EU ministers held a minute’s silence at the start of their meeting, in memory of Britain’s Queen Elizabeth, who died on Thursday after 70 years on the throne.
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Additional reporting by Sabine Siebold, Bart Meijer, Marine Strauss, by Benjamin Mallet, Philip Blenkinsop, Gabriela Baczynska; Writing by Kate Abnett and Ingrid Melander; Editing by Edmund Blair
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