The partial halt in the transit of Russian gas through the Ukrainian GTS led to a sharp jump in spot gas prices in Europe. This is evidenced by trading data on the London Stock Exchange. The European Commission is preparing an emergency plan.
Ukraine yesterday announced the termination of transit through the Sohranivka checkpoint and the Novopskov border compressor station. “Due to force majeure circumstances, the transportation of Russian gas to Europe through the Sokhranovka station is suspended from today, Wednesday, May 11,” the statement says. message of the managing company GTS of Ukraine.
This happened after Sohranivka and Novopskov were captured by the Russian army. The GTS of Ukraine announced a threat to transit and recalled their specialists.
While the State Customs Service offered to transport the fuel to another location (via the Sudzha station) to avoid supply disruptions, Gazprom stated that it was technically impossible to redirect the gas flow to Ukraine to a new entry point. Gazprom also assured that it is fulfilling all its obligations to gas buyers in Europe, adding that it sees no signs of “force majeure” or any obstacles to gas supplies, as before.
The Novopskov CS is the first of the compressor stations of the Ukrainian GTS in the Luhansk region, through which almost a third of the gas (up to 32.6 million cubic meters per day) is transited from Russia to Europe. The volume of gas transported from Russia to Europe through Ukraine today, Wednesday, is 72 million cubic meters, compared with 95.8 million cubic meters on Tuesday.
Immediately after the Ukrainian GTS operator announced the termination of transit through the Lugansk region, the spot price in EU jumped by 12.4% – from 980 to 1100 dollars per thousand cubic meters. According to information from European publications, in particular the Spanish el pais, Gazprom also assured that it is fulfilling all its obligations to gas buyers in Europe, adding that it sees no signs of “force majeure” or any obstacles to gas supplies, such as before.
The Spanish El pais reported that European Commission considering alternatives for cutting off gas supplies from Russia. The mere fact that this is seen as possible is enough to cause concern. On May 18, the commission will present an emergency plan of action.
It includes measures such as:
- remote operating up to three times a week, which could save 500,000 barrels of oil. One day of remote work is equivalent to cutting oil production by 170,000 barrels a day.
- Reduced speed on motorways by at least 10 kilometers per hour, means a decrease of 430,000 barrels.
- Sunday no cars in cities means 380,000 barrels less.
- Mode introduction even and odd rooms for leaving transport saves 210,000 barrels of oil.
It is worth noting that the leadership of the European Union did not even consider the issue of launching Nord Stream-2which was previously frozen. However, it is quite possible that the cessation of the work of the GTS of Ukraine will become the force majeure that will lead to its launch. Other suggestions to save energy include limiting business air travel, using electric cars and trains instead of airplanes.
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