Energy securityCan Europe Escape Gazprom's Energy Stranglehold?

By Andrey Gurkov

Published 12 July 2021

When it comes to gas supplies to the EU, Russia’s state-owned corporation Gazprom steps on the brakes, and natural gas reservoirs are unusually low. Is Russia building up political pressure in order to push through the operation of the Nord Stream 2 pipeline?

Trouble is brewing on the European gas market. In the wake of a long, cold winter, natural gas reservoirs are unusually low and should, in principle, be refilled very quickly. Russia’s state-owned corporation Gazprom could increase supplies.

The market leader, however, has not done that, despite prices recently reaching a 13-year high. In turn, there is growing concern across Europe that there may be insufficient gas supplies for the upcoming winter. 

No Additional Transit through Ukraine
Gazprom has not booked any additional gas transit through Ukraine in July, although deliveries of Russian natural gas to the EU will drop by more than 2 billion cubic meters this month.

Due to scheduled maintenance, the two remaining transportation routes to Germany will be temporarily discontinued. The Yamal pipeline across Belarus and Poland was shut down this week, and the much larger Nord Stream pipeline through the Baltic Sea will be closed between July 13 and July 23.

It appears Gazprom not only optimizes price and quantity, but that it would rather exert pressure in order to ensure completion of the Nord Stream 2 pipeline,” Joachim Endress, head of the Berlin-based consulting firm Ganexo, observes in his second-quarter 2021 Gas Market Report.

Gazprom insists that it fulfills all its obligations.

Long-term contracts are the basis of our business in Europe. We strictly fulfill our customers’ orders, and we book transit capacities accordingly, not vice versa,” the corporation’s press department told DW.

Unusually Empty Natural Gas Reservoirs in Germany, Austria
Gazprom’s fulfillment of its contractual obligations has not been challenged. The question remains why the corporation was not — despite high demand and prices — increasing its supplies to Europe and what exactly it was doing to fulfill those obligations, Heiko Lohmann, a Berlin-based independent gas market expert, told DW.

What’s notable, and this is really something new, is that Gazprom obviously fulfills its contracts by taking significantly more gas than usual from reservoirs in Europe and, possibly, even by purchasing trading quantities on the European market. At least, that’s what I hear from dealers,” Lohmann said.

As a result of this approach, Gazprom’s two most important reservoirs in Europe — the first, the largest in the EU, in the northwestern German town of Rehden, the other, in the western Austrian town of Haidach — were almost totally depleted at the beginning of summer, and replenishment has only just begun. “This is utterly unusual for Gazprom and calls for political interpretation,” the expert said.