Mon. Apr 22nd, 2024

Prof. ST Hsieh

Director, US-China Energy Industry Forum


[email protected]

April 26, 2022

Ukraine war is entering 63 days with no end in sight. US led coalition has initiated full scale sanction against Russia along with almost unlimited supply of ammunitions to Ukraine, so Russia will shut off gas supplies to Poland and Bulgaria should not be a surprise. Because both nations have refused Russian’s request of paying energy in Rubles. We also can expect that more EU nations will be cutoff by Russia. War is war!

The interesting case is that US led EU have announced sanctioning all Russian energy. It is EU nations that can not cutoff Russian energy now.

By these announcements, Russia is taking the offense and forcing the hands of EU nations. Germany will be in a tough spot risking an industry collapse. Which in turn will cause global recessions.

It is a test of rising energy cost and how long any nation can sustain the economy without sufficient energy supply.

Ukraine’s position is not realistic or even rational “That is why the EU needs to be united and impose an embargo on energy resources, depriving the Russians of their energy weapons.


Russia will shut off gas supplies to Poland, state-run company says

By Sugam Pokharel, CNN Business

Updated 4:54 PM ET, Tue April 26, 2022

London (CNN Business)In a dramatic escalation of tensions with the West, Russian energy giant Gazprom informed Poland’s state-run gas firm PGNiG said that it will entirely suspend” gas supplies along the Yamal pipeline starting Wednesday morning, PGNiG said in a statement on Tuesday.

“On April 26, Gazprom informed PGNiG of its intention to entirely suspend deliveries under the Yamal contract at the beginning of the contract day on April 27,” the statement read.

The news sent US natural gas futures up about 3% Tuesday.

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 has continued.

The Kremlin said payments for gas being delivered at the time of its announcement would fall 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 has sent shockwaves through Europe, which cannot keep its economy running for long without Russian energy.

Poland said “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.

The Polish gas firm said that currently all deliveries to customers are carried out in accordance with their needs, adding that the company is monitoring the situation and is prepared for various scenarios.

“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.

BBC: Ukraine war: Russia to halt gas supplies to Poland and Bulgaria

Following the news, Poland’s climate ministry said the country’s energy supplies were secure.

Climate Minister Anna Moskwa said there was no need to draw gas from reserves and gas to customers would not be cut.

Poland’s Deputy Foreign Minister, Marcin Przydacz, said his country had been preparing for the possibility Russia might limit gas exports by diversifying its supplies.

“I’m pretty sure that we will manage to handle this,” he told the BBC.

He added that the suspension proved Moscow was “not a reliable partner in any kind of business” and urged other European nations like Germany to support a ban on Russian energy imports.

On 1 May, a new gas pipeline connection with Lithuania is also due to open that will give Poland access to gas from Lithuania’s LNG terminal.

And a new pipeline delivering gas from Norway, known as the “Baltic Pipe”, comes online in October. It should reach full capacity by the end of the year and could replace all Russian deliveries.

But Gazprom supplies more than half of all Poland’s gas imports. That’s a big hole to fill.

And Poland is not the only EU country now seeking to stop buying Russian energy.

There’s a lot of competition on an already tight gas supply market. When the heating season starts again in the autumn and demand rises, Poland could face a tricky few months securing enough supply.

And if it does so, it may have to restrict supplies to large industrial users.

WARSAW, Poland (AP) — Officials in Poland and Bulgaria said Tuesday that Russia is suspending their countries’ natural gas deliveries after they refused to pay for their supplies in Russian rubles.

The suspensions would be the first since Russian President Vladimir Putin said last month that “unfriendly” foreign buyers would have to pay the state-owned Gazprom in rubles instead of dollars and euros. No country, except Hungary, has agreed to pay in bules.

If Gazprom suspends supplies to other countries, it could cause economic pain to Europe, causing gas prices to rise and possibly leading to rationing. Germany is particularly vulnerable due to its heavy dependence on Russian gas. But cutoffs would also deal a blow to Russia’s own

Later, the Bulgarian Energy Ministry said it was notified that Bulgaria’s supplies of Russian gas via the TurkStream pipeline would cease on Wednesday as well.

Several years ago it opened its first terminal for liquefied natural gas, or LNG, in Swinoujscie, on the Baltic Sea coast, while later this year a pipeline bringing gas from Norway, called “Baltic Pipe,” is to become operational.

“There will be no shortage of gas in Polish homes,” Moskwa tweeted.

But the Bulgarian government said no restrictions on domestic gas consumption would be imposed for now even though the Balkan country of 6.5 million meets over 90% of its gas needs with Russian imports.

Russia to Cut Gas to Poland and Bulgaria, Making Energy a Weapon

Maciej Onoszko, Maciej Martewicz and Slav Okov

Tue, April 26, 2022, 1:18 PM

(Bloomberg) — Russia will cut off the gas to Poland and Bulgaria on Wednesday in a major escalation in the standoff between Moscow and Europe over energy supplies and the war in Ukraine.

European gas prices surged as much as 17% as traders calculated the risk of other European countries being hit next.

The threat of cutoffs has been looming for weeks, but there was an indication last week that the EU was suggesting a potential way out of the standoff. The move against bloc members Poland and Bulgaria probably makes some kind of compromise less likely. It also removes from the EU’s toolkit the option of sanctioning Russian gas.

“Any buyer rejecting the new payment procedure out of hand is running a very real risk of supplies being cut,” said Katja Yafimava, senior research fellow at the Oxford Institute for Energy Studies.

“The decision of Russia to stop gas supplies to Poland and Bulgaria represents an historical turning point in the bilateral energy relationship and might well represent the preview of similar moves coming up vis-a-vis other European countries in coming weeks,” said Simone Tagliapietra, a researcher at the Bruegel think tank. “European governments now need to deploy all emergency measures they have at their disposal, both on the supply and demand side to ensure security of supply.”

Other companies have more time and European governments and executives are in many cases still trying to figure out how best to respond.

“The Polish example suggests that those buyers that will not accept the new mechanism or will not secure an exemption from it are likely to see their supplies cut as well if no payment has reached Gazprom’s account when it is due,” Yafimava said.

Ukraine accuses Russia of blackmail with plan to halt gas to Poland

Marek Strzelecki, Phil Stewart and Pavel Polityuk

Mon, April 25, 2022, 4:50 PM

WARSAW/ RAMSTEIN AIR BASE, Germany/KYIV (Reuters) – Kyiv accused Russia of blackmailing Europe by cutting off gas supplies to Poland and Bulgaria as the crisis in Ukraine deepened, with tensions surging in nearby Moldova and Moscow warning the West to back off.

Andriy Yermak, the chief of staff to Ukrainian President Volodymyr Zelenskiy, said Russia was “beginning the gas blackmail of Europe”.

“Russia is trying to shatter the unity of our allies. Russia is also proving that energy resources are a weapon. That is why the EU needs to be united and impose an embargo on energy resources, depriving the Russians of their energy weapons.”

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