Finance

Putin puts demands on extra gas supply to the EU

That amount amounts to about 10 percent of the gas that Russia supplied to Europe and Turkey in 2020. And that could happen the day after tomorrow if Nord Stream 2 is approved tomorrow, Putin said last night, according to Reuters news agency.

Relief for crisis

The billions of extra cubic meters could provide immediate relief at a time when gas prices in the EU are skyrocketing and consumers feel the consequences directly in their wallets.

The new pipeline is being paid for by Kremlin-owned Russian energy giant Gazprom and European partners. In principle, the pipeline can be put into operation, but approval from the German regulator is still awaited, a process that could take months.

Political weapon

Last Monday, the Swiss operator of Nord Stream 2 announced that the first line is now filled with gas. According to Putin, the Russians are on track to have the second line full by mid-December.

Putin’s statements are likely to cause anger in the EU and beyond as Russia makes it clear that it is withholding gas and links its supply to approval for Nord Stream 2.

According to the US and some Eastern European countries, Putin is using the gas crisis and the pipeline as a political weapon to increase Europe’s dependence on Russia. He would also use the pipeline, which runs under the sea and bypasses Ukraine, to cheat that country of the transit tariffs for gas via the traditional routes.

Gas prices still skyrocketing

Putin said last week that it is nonsense to use the crisis as a political weapon. Yesterday he added that the EU’s energy policy is made by ‘non-specialists’ who ‘mislead voters’.

In his view, it would be better to focus on avoiding future crises, with projects such as Nord Stream 2, rather than focusing on the so-called spot markets for gas, where prices can vary considerably. The Russians want European countries to sign long-term contracts with Gazprom.

On that spot market, a megawatt hour of gas costs about 88 euros today. That is considerably lower than the record of 116 euros at the beginning of October, but still almost 4.5 times as much as the price at the beginning of this year.

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