Ukraine War: Russia Trying to Divide Allies Using Gas – Poland

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The “era of Russian fossil fuel in Europe” is coming to an end, the European Commission president warned – hours after Moscow cut off gas exports to Poland and Bulgaria.

Ursula von der Leyen said it showed Russia’s “unreliability” as a supplier.
Political leaders in Warsaw and Sofia had already said Russian energy giant Gazprom’s move amounted to “blackmail”.

But the Kremlin said Russia had been forced into the action by the “unfriendly steps” of Western nations.
Kremlin spokesperson Dmitry Peskov added that Moscow remains a reliable energy partner.

Gazprom’s cut-off follows Poland and Bulgaria’s refusal to pay for gas in Russian roubles – a demand made by President Vladimir Putin in March, which was designed to shore up the faltering currency battered by Western sanctions.

Should we be worried about a gas supply crisis?
In a statement issued on Wednesday, Gazprom said it had “completely suspended gas supplies” to Poland and Bulgaria in line with the decree issued by Mr. Putin.

The company also warned the countries – which are transit states for Russian gas – that any unauthorised withdrawal of gas intended for other European nations would see supplies reduced by an equivalent amount.

Polish state gas company PGNiG confirmed that Gazprom’s supplies to the country had been halted and warned that it reserved “the right to seek compensation.”

Polish President Andrzej Duda said “appropriate legal steps” will be taken against Gazprom, while his deputy foreign minister, Marcin Przydacz, told the BBC that Russia was seeking to “foster divisions” between Western allies.

Gazprom says Poland and Bulgaria are being targeted because they have refused to pay for its gas in Russian rubles.

But Poland’s Prime Minister Mateusz Morawiecki says cutting gas supplies is retaliation for Tuesday’s announcement of Polish sanctions on 50 Russian individuals and companies, including Gazprom.

Polish consumers will still have gas from their stoves this morning, but the supply cut is a significant challenge for the remainder of the year.

In the first quarter of 2022, PGNiG bought 53% of its gas imports from Gazprom, down from 61% in the whole of last year. That’s a lot of gas to replace in one go.

Yes, the Polish government has successfully reduced its dependence on Gazprom in recent years, by building a liquefied natural gas terminal in Swinoujscie – where it receives tankers from Qatar.

And pipeline capacity with neighbouring EU countries is increasing. Forward thinking means Poland’s gas storage is about three quarters full and consumer demand is lower over spring and summer.

But the fact remains, Poland still needs to secure alternative supplies for the rest of the year in an already tight global market.

By the end of the year, a new pipeline that will allow Poland to directly import gas from Norway – replacing Russian deliveries – will be fully operational.

Bulgarian Prime Minister Kiril Petkov said the country was reviewing all of its contracts with Gazprom, including for transit of Russian gas to Serbia and Hungary, emphasising that “one-sided blackmail was not acceptable.”

Sofia, which relies on Gazprom for more than 90% of its gas supply, said overnight it had taken steps to find alternative sources but no restrictions on gas consumption were currently required for Bulgarians.
Ms von der Leyen, speaking in Brussels, said Gazprom’s move was “unjustified and unacceptable,” but emphasised that the bloc was “prepared for this scenario.”

Ursula von der Leyen said the EU will support member states impacted by the gas freeze. The EU leader also hit out against reports carried by the media outlet Bloomberg which alleged 10 European energy companies are preparing to make payments for Gazprom gas in rubles, and that four energy companies have done so already.

She said such moves would be “high risk” for the corporations and would constitute “a breach of our sanctions. Our guidance here is very clear,” Ms von der Leyen said.

While the EU has been firm that it will not comply with Mr. Putin’s demands that payments be made in rubles, Hungary has reached a workaround deal with Gazprom.

The countries will pay into a euro-denominated account with Gazprombank, a subsidiary of the energy giant, which in turn will deposit the amount in rubles. Mr. Peskov refused to say how many other countries have agreed to make payments in this way.

Ahead of Gazprom’s announcement, Ukrainian President Volodymyr Zelensky’s chief of staff accused Russia of “beginning the gas blackmail of Europe.”

Meanwhile, Vyacheslav Volodin, speaker of the Duma – the lower house of Russia’s parliament – praised Gazprom’s move and urged it to take similar action against other “unfriendly” countries.

Europe depends on Russia for more than a third of its gas needs and Gazprom holds a monopoly on pipeline supplies in Russia.

BBC

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