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Gazprom Threatens Ukraine With Non-Payment for Gas Transit in Fresh Escalation

Commodities Sep 27, 2022 06:04PM ET
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By Geoffrey Smith 

Investing.com -- Russian gas monopoly Gazprom (MCX:GAZP) took an important step toward cutting off almost all of its remaining supplies to the EU on Tuesday, as the Kremlin pulled its last remaining levers to pressure western and central Europe into dropping its support for Ukraine.

In a post on its official Telegram channel, Gazprom said it may seek to add the Ukrainian gas pipeline operator Naftogaz Ukrainy to Russia's list of sanctioned entities, ratcheting up a dispute over the Ukrainian company's alleged failure to ship Russian gas westward according to its sales contract.

This would prevent it from paying Ukraine its usual transit fees, a move that would pave the way for the suspension of physical shipments. 

Gazprom claimed that it had no other option, because the jurisdictions where the two parties had agreed to submit their disputes for arbitration - Sweden and Switzerland - have turned hostile to Russia, denying it the chance of a fair hearing. 

The timing of Gazprom's intervention is eye-catching, coming on the same day that several European Union members accused Russia of sabotaging the two Nord Stream pipelines that run under the Baltic Sea to Germany, which was Europe's biggest buyer of Russian gas until the Kremlin's invasion of Ukraine in February. 

Danish and Swedish seismologists both detected what they said were two blasts from the vicinity of the pipelines which have led to massive leaks of highly explosive gas to sea level. 

 “There is no doubt that these were explosions,” Björn Lund, an expert with the National Seismology Center, told Swedish state broadcaster SVT.

The Nord Stream pipelines were already essentially idle, but the blasts rule out any prospect of a resumption of Russian gas flows in the foreseeable future. 

Ukraine's pipeline network is the only viable alternative route for sending large volumes of Russian gas to Europe, so Gazprom's threat against Naftogaz creates an effective pretext for it refusing to use it.

"Today, Russia brought its energy weaponisation against Europe to the next level: from economic to hybrid war," said Simone Tagliapetra, an analyst with the Bruegel think-tank in Brussels, via Twitter  TWTR, adding that Europen needs "to adjust our response and preparedness accordingly."

The risk of more extreme Russian action against Europe's gas supplies appears already to have spread to Norway's offshore oil and gas industry, now the biggest single source of gas for Europe as the winter heating season starts.  

Norway's Petroleum Safety  also warned on Monday of an increase in unidentified drone flights close to offshore installations and urged "increased vigilance by all operators and vessel owners," stressing the need to report any further sightings.

Russian policy - both at home and abroad - has become visibly erratic since Ukrainian forces recaptured wo weeks ago large areas of territory occupied by Mosow's forces since the summer. President Vladimir Putin has initiated the annexation of territories still held by his forces and threatened to use nuclear weapons against the West if it tries to stop the process. He's also ordered the mobilization of hundreds of thousands of reservists - a policy that has led to nationwide protests and a panicked mass exodus of fighting-age men trying to avoid the draft. 

 

 

Gazprom Threatens Ukraine With Non-Payment for Gas Transit in Fresh Escalation
 

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Comments (10)
Sebastien Baltzer
Sebel Sep 28, 2022 2:23AM ET
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evil....
Vito Tagliano
Vito Tagliano Sep 28, 2022 2:16AM ET
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NG to the Moon! $EQT
Lars HH
Lars HH Sep 28, 2022 1:40AM ET
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I suspect Poland blew up the NS 1-2. They have the capacity and the motive and a fierce hate for Russians and want no peace.
Billy Foos
Billy Foos Sep 27, 2022 8:33PM ET
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Sucks to be them… Now we need to get MAGA republicans back in power and start drilling again… Democrats want us cold hungry and angry… They want us to have nothing to lose.. But we have something.. We have our country and eachother. End the war with Russia! Bring in MAGA republicans & drain the swamp.
deeeeeez nuttttzzzzFJB
deeeeeez nuttttzzzzFJB Sep 27, 2022 8:33PM ET
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sad that this gets down voted. America 🇺🇸 what happened to us?
Brad Albright
Brad Albright Sep 27, 2022 8:33PM ET
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We returned to our time honored values.
Sean Connery
idiotstockpicker Sep 27, 2022 8:33PM ET
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Get rid of both parties and lets run our country ourselves.
Brad Albright
Brad Albright Sep 27, 2022 7:33PM ET
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98,000 Russian men have evacuated to Kyrgyzstan since the mobilization was announced. Others to Georgia, Mongolia and Latvia. Many still are reporting as commanded to the meat grinder.
Mike Brarey
Mike Brarey Sep 27, 2022 7:30PM ET
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why would Russia sabotage the North Stream which was built with so much opposition from the US?
Maximus Maximus
Maximus Maximus Sep 27, 2022 7:30PM ET
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Because the russians are cornered and desperate, and trying to inflict as much damage to European energy supplies as possible in the hope that they will stop helping Ukraine win the war. They will however fail at that too..
Adam Smith
Adam Smith Sep 27, 2022 7:08PM ET
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Bad journalism. Biased story.
PAULIUS MATIUSOVAS
PAULIUS MATIUSOVAS Sep 27, 2022 7:01PM ET
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EU and others sitting their pants because everything is better than expected in rosija
Maximus Maximus
Maximus Maximus Sep 27, 2022 7:01PM ET
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sitting? and what exactly is it that you think is going so well in russia as they are losing and descending into chaos?
PAULIUS MATIUSOVAS
PAULIUS MATIUSOVAS Sep 27, 2022 7:00PM ET
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mobilisation going better than expected..EU and others shittim their pants
Seth Amenyah
Seth Amenyah Sep 27, 2022 6:50PM ET
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And so what. Useless post
 
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