Russia is going to leave the EU without gas. What danger does it pose, and will Europe be able to cope with it?

August 04, 2022

The Russian Gazprom company actually refused to take a Siemens turbine back due to the "sanctions regime" and "inconsistency of the present situation with the current contractual obligations." What does this mean? Will Europe be able to stand in a gas war with Russia? How will these events affect Ukraine? The "Comments" publication turned to experts with these questions.

In our opinion, it will be a strategic defeat for Gazprom and for Russia as a whole.

General Director of Naftogazbudinformatyka LLC, Chairman of the Expert Board on Gas Industry and Natural Gas Market Leonid Unihovskyi comments as follows:

— "I believe that Europe will stand. Yes, there will be temperature limitations in winter, same as now – with air conditioning, but the earlier dependence on Gazprom will no longer exist."

In other words, the expert continues, it will be a strategic defeat for Gazprom and for Russia as a whole. But will the Russian Federation itself see it as a strategic defeat?

— "In my opinion, what is going on now leads to the conclusion that in the fall, both Nord Stream-1 and Ukrainian gas transit will be reduced to zero," Leonid Unihovskyi sums up.

In a short run, Gazprom will reduce the volumes of pumping through our GTS.

Maksym Bielawski, Razumkov Center energy expert, ex-director of integrated communications at Naftogaz of Ukraine, believes that the European Union will be able to defend its position in the gas war with the Russian Federation.

— "Furthermore, in my opinion, the European Commission has no illusions about the future supply of Russian gas to the EU market. This is primarily evidenced by the approved program of gas consumption cuts by 15%. Moreover, despite numerous claims of the Russian propaganda that "Europe will freeze out", the European gas market remains balanced. Compared to the same period of the previous year, the volume of natural gas supplied to the EU increased by approximately 7% — against the background of a 40% reduction in the Russian gas deliveries. At the same time, the volume of gas consumption decreased by 22%," the expert notes.

In his opinion, one should pay attention to spot quotations at gas hubs. Say, in France and Great Britain, the price of a thousand cubic meters of gas does not exceed 1.6 thousand dollars, while in the conditional Austro-German trade area, quotations exceed 2.2 thousand dollars for a thousand cubic meters of blue fuel.

— "Such a difference," explains Maksym Bielawski, "is caused by the absence of Russian gas in the Franco-British trade area, where the price signal is formed by the supply of liquefied gas. Indeed, the Austro-German trade area immediately depends on the supply of Russian gas. Hence such anomalies, including the effects of a psychological factor that reflects the negative expectations of consumers of Russian gas."

In such conditions, the expert continues, Gazprom sets for itself the task of intensifying price shocks on the European gas market (primarily in the Austro-German trade area) through panic, hysteria, based, in particular, on reports about the fate of the turbine and the future of Nord Stream-1 in general. The goal is to utmost weaken the financial and economic capabilities of Ukraine's allies by aggravating the economic recession and euro inflation.

— "I expect a drop in the Russian gas supply to Europe. It is already clear that the EU is ready for this," emphasizes Maksym Bielawski. — Most likely, Gazprom will reduce the volume of transportation through our GTS to European countries in the short run. In this connection, it is important to accumulate blue fuel in gas storage facilities, which Ukraine is doing now."

Maksym Bielawski

Leading Expert, Energy Programmes


Born in 1986 in Zhytomyr oblast

Education:

Zhytomyr State Technological University (2008)

Ph.D in Technical Science (2010)

Ivano-Frankivsk National Technical University of Oil and Gas (2012)

Author of 17 patents and 100 scientific works

Work Experience:

2008 – 2011 — Operator of Gas Infrastructure Units, Controller of Gas Transmission System in Rivne Division of PJSC "Ukrtransgas"

2011 – 2017 — Leading Engineer, Deputy Head of Press-Service, Head of Public Relation Department of PJSC "Ukrtransgas"

2017 – 2018 — HR Director of PJSC "Maine Gas Pipelines of Ukraine", Advisor to the Minister of Energy and Coal Industry of Ukraine

2021 — Director of Integrated Communications of NJSC "Naftogaz of Ukraine"

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