From September 1, Gazprom will stop gas supplies to French energy company Engie due to non-payment of July supplies.
Gazprom Export has informed Engie that gas supply has been completely suspended until all funds have been received for the gas supplied starting September 1, 2022,” said Gazprom Export.
The Russian company recalled the new payment scheme for gas, and also announced that, according to the decree of the President of the Russian Federation, gas supply to it is prohibited if a foreign buyer does not make full payment within the contract period.
Regarding Gazprom’s decision, a spokesperson for the French Ministry of Energy Conversion said, “We prepared for it by diversifying our supply sources and replenishing our reserves as much as possible.”
Disputes between Gazprom and Engie
Earlier, Engie, 24% state-owned, received a notification from Gazprom about a further reduction in gas supply. The extent to which the company will reduce pumping was not reported.
The French side explained that the decrease in supply was due to “disputes between the parties regarding the implementation of contracts”. At the same time, the company stated that the interruption of supply will not affect the gas supply to its customers.
“Engie has accumulated the necessary volumes to meet its obligations to customers and its own (technical) requirements, and has implemented a set of measures to significantly reduce any direct financial or physical damage from Gazprom gas transportation disruption,” writes Engie. referring to the statement of . .
Nikita Blokhin, a senior analyst at Alfa-Bank, admitted in an interview with the Vedomosti newspaper that Gazprom’s disagreements with the French concern “may relate to deals under a long-term contract.”
According to the European Commission’s statements on payments for Russian gas, European companies should consider gas payments as a fact of fulfilling their contractual obligations. But Gazprom, according to Russian legislation, is obliged to consider the crediting of money in rubles after conversion as a fact of payment for deliveries.
“As both companies have to comply with the national legislation of the country in which they operate, disagreements may arise between them over the interpretation of certain provisions of the contract,” said the expert.
What will happen to gas supplies to France?
Engie said Gazprom’s deliveries have already “significantly” decreased since the start of the military operation in Ukraine.
According to the company, it recently received just 1.5 TWh per month (about 145.7 million cubic meters per month). At the same time, Engie’s total annual supply to Europe is more than 400 TWh.
Russian gas approx. 17% of France’s needs. According to the International Energy Agency, Russia supplies about 14 billion cubic meters to France each year. gas m.
In June, Engie became one of three French energy companies urging citizens and businesses to limit gas consumption amid the risk of cuts in fuel imports from Russia. French Prime Minister Elisabeth Born later warned that consumers would otherwise face gas cuts with “serious economic and social consequences”.
Gas storage facilities are over 90% full
Reuters reported that Gazprom’s decision to cut gas supplies to France will not affect the situation in the country’s energy market in any way.
Engie’s vice president, Claire Waysand, said France’s gas storage facilities are more than 90% full, so France “must have enough fuel to survive a mild winter”.
He also warned that the situation could worsen during possible colds.
Engie also started negotiations with Algerian Sonatrach as part of its strategy to replace Russian supplies. In April, French President Emmanuel Macron said that France was making every effort to purchase gas from alternative suppliers.
Later in France and Europe in general The “era of abundance and carelessness” is over.
Since the beginning of the year, Gazprom has reduced its gas exports to countries outside the CIS by 36.2%, to 78.5 billion cubic meters. m At the same time, the company did not rule out that gas prices in Europe could rise above the record level of $4,000 per 1,000 cubic meters during the winter months.
According to Bloomberg, on 27 August EU reserves were filled by 79.4%, compared to the 80% target by 1 November. The agency estimates this will help European countries get through the winter without Russian gas, but it is unlikely to meet more than 30% of the region’s energy needs.