Russia’s Gazprom shuts off gas supplies to Poland and Bulgaria


London
CNN Business
 — 

Russia has cut off natural gas supplies to Poland and Bulgaria, dramatically escalating its response to Western sanctions imposed on Moscow over the war in Ukraine.

Russian state energy giant Gazprom said in a statement Wednesday that it had fully halted supplies to Polish gas company PGNiG and Bulgaria’s Bulgargaz after they refused to meet a demand by Moscow to pay in rubles, rather than euros or dollars.

The European Commission described the decision to halt supplies as attempted “blackmail” and said it was coordinating a response among EU member states.

“Europeans can trust that we stand united and in full solidarity with the member states impacted in the face of this new challenge. Europeans can count on our full support,” European Commission President Ursula von der Leyen said in a statement.

PGNiG said in a statement Tuesday that it had been informed by Gazprom that deliveries through the Yamal pipeline would be suspended starting Wednesday.

Gazprom had also told Bulgargaz that it would shut off gas supplies starting Wednesday, Bulgaria’s energy ministry said in a statement. The ministry said paying in rubles was unacceptable and posed “significant risks” to Bulgaria.

It said the Bulgarian side has “fully fulfilled its obligations and has made all payments required under this contract in a timely manner, diligently and in accordance with its provisions.”

The news sent US natural gas futures up about 3% Tuesday. European gas prices jumped nearly 20% on Wednesday morning, Reuters reported.

Russia delivered an ultimatum last month to “unfriendly” nations that they must pay for their energy in rubles starting April 1 or risk being cut off from vital supplies. But the flow of gas had continued until Wednesday.

The Kremlin said payments for gas being delivered at the time of its announcement would be due toward the end of April or the beginning of May, which is why Russia didn’t immediately shut off the flow of gas to Europe.

President Vladimir Putin’s high-stakes threat sent shockwaves through Europe, which cannot keep its economy running for long without Russian energy. Moscow sent a clear signal that it could at some point reduce natural gas flows.

“The announcement by Gazprom that it is unilaterally stopping delivery of gas to customers in Europe is yet another attempt by Russia to use gas as an instrument of blackmail,” von der Leyen said. “This is unjustified and unacceptable.”

A gas crisis management group of EU member states and industry representatives was meeting Wednesday to discuss coordinating supplies, she added.

Poland and Bulgaria said they had been preparing for the possibility of Russian action, and that supplies to businesses and households were unaffected.

“At present, no restrictive measures have been imposed on gas consumption in Bulgaria,” the energy ministry added.

PGNiG said it had made preparations to obtain gas from various sources, including through gas connections on its western and southern borders and a liquefied natural gas terminal (LNG) in the northwest port city of Swinoujscie.

It also said its underground gas storage facilities were almost 80% full.

“The balance sheet is supplemented by domestic gas production and fuel reserves accumulated in underground gas storage facilities. Currently, the warehouse filling level is around 80 percent and is significantly higher than in the corresponding period in previous years,” it added.

Poland’s Climate Minister Anna Moskwa said Tuesday that there would be no shortage of gas in Poland despite the Russian halt of exports.

“Poland has the necessary gas reserves and sources of supply that protect our security — we have been effectively independent of Russia for years,” she said in a tweet.

“There will be no shortage of gas in Polish homes,” the minister wrote.

— CNN’s Anna Odzeniak, Uliana Pavlova, Josh Pennington and Angela Dewan contributed to this report

Leave a Comment