Gazprom said on Tuesday that it had completely cut off gas supplies to Dutch gas trader GasTerra.
It later stated that it will also cut off gas flows to Denmark’s Orsted and Shell Energy from June 1 for their gas supply contract to Germany, after both stopped paying in rubles.
The announcements follow the agreement reached on Monday by the leaders of the European Union to reduce Russian oil imports by 90% by the end of the year, the bloc’s toughest response to the invasion of Ukraine.
GasTerra, which buys and markets gas on behalf of the Dutch government, said it had contracted elsewhere for the 2 billion cubic meters of gas it expected to receive from Gazprom by October.
Economy Ministry spokesman Pieter ten Bruggencate said “it is not yet considered a threat to supply.”
Orsted, who also indicated that there is no immediate risk to Denmark’s gas supply, said on Tuesday that will turn to the European gas market to fill the gap.
The nearest month benchmark gas contract rose nearly 5% on Tuesday afternoon to around 91.05 euros/MWh, still well below the highs of more than 300 euros/MWh reached earlier of March.
“Although the market was largely expecting the cut for both companies, this development will make the balance between supply and demand much tighter,” ICIS analyst Tom Marzec-Manser said on Twitter.
Flows of Russian gas to Germany via the Nord Stream pipeline fell on Tuesday, which analysts said was likely due to the outage in the Netherlands.
Russia had already cut off natural gas supplies to Bulgaria, Poland Y Finland citing his refusal to pay in rubles, a demand made in response to Western sanctions that have isolated Russia.
The supply cuts have pushed up already high gas prices, accelerating inflation and prompting European governments and companies to seek alternative sources and the infrastructure to manage them, such as floating storage and regasification units.
Source: Ambito
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