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Russia's Gazprom Declines To Book Extra Capacity On Ukraine, Poland Pipelines


Gas prices in Europe have spiked in recent weeks, fueled by low inventories and a strong recovery in global demand as economies emerge from the coronavirus crisis.

Russia's state-controlled Gazprom declined to book more pipeline capacity via Ukraine and Poland to ship gas to Europe in the first three quarters of next year, in a sign it may be waiting for approval of the Russian-led Nord Stream 2 pipeline to Germany.

President Vladimir Putin said last week that Gazprom would start pumping extra natural gas into European gas storage facilities once Russia finishes filling its own stocks, which could happen by November 8.

However, Gazprom did not book additional gas transit capacity via in Ukraine and the Yamal-Europe pipeline to Germany for January-September 2022, according to the results from several capacity auctions on November 2.

Bloomberg reported that Gazprom can still book capacities at forthcoming monthly sales.

Gas prices in Europe have spiked in recent weeks, fueled by low inventories and a strong recovery in global demand as economies emerge from the coronavirus crisis.

Russia, which provides one-third of Europe's gas imports, has been accused by some analysts and European officials of exacerbating the energy crisis to advance approval of the controversial Nord Stream 2 pipeline running under the Baltic Sea.

Moscow denies it is withholding supplies to exert pressure.

German regulators have until January to make a decision on whether Nord Stream 2 is an independent transport network in line with EU directives, after which the European Commission has another two months to respond.

Early in October, the operator of Nord Stream 2 said that the first string of the pipeline would be gradually filled to build inventory and pressure.

"Gazprom is presumably betting on Nord Stream 2 coming online fairly soon -- and does not want to assume additional obligations as of now as the Ukraine transit route and the Yamal-Europe pipeline are likely to be used as balancing routes once Nord Stream 2 is up and running," Dmitry Marinchenko, senior director at Fitch ratings agency, told Reuters.

Ronald Smith, senior oil and gas analyst at BCS brokerage, told the news agency that Russia appears to want to fill Nord Stream 2 with gas taken from the Yamal-Europe pipeline.

"If Nord Stream 2 isn't soon approved for launch, however, Gazprom may be forced to request additional, more traditional transit capacity on Yamal-Europe," he said.

With reporting by Bloomberg and Reuters
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