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Gas prices in Europe and Britain are on the rise, as Russia has said that the capacity of the North Stream 1 pipeline, which supplies gas directly to Germany, could be reduced by almost 60 percent.
This means a reduction in gas supplies to Europe.
How much gas does Russia send to Europe?
Historically, Europe has depended on Russia for almost 40 percent of the natural gas it needs.
Most are shipped via pipelines, including the Yamal, which crosses Belarus and Poland to reach Germany, followed by the North Stream 1 pipeline, which runs directly to Germany, and other pipelines that pass through Ukraine.
A network of interconnected pipelines then connects the domestic gas markets in Europe.
Not all countries receive gas directly from Russia, but if countries like Germany – the main buyer of Russian gas in Europe – receive less gas, they should immediately consider other options.
As a result, changes in Russian supplies could cause instability in both Britain and Europe, although Britain supplies four percent less Russian gas.
Fewer Russian supplies mean fewer reserves in Norway, one of the key gas suppliers.
What is happening now?
Russia has already started reducing supplies to Europe since the second half of 2021, as the amount in three pipelines has decreased by 20 percent, compared to the second half of 2020.
European gas prices have risen in 2021, as supplies have not been in line with demand driven by the economic recovery following the coronavirus pandemic.
Despite smaller supplies, Russia’s state-owned gas company Gazprom has said it is enforcing all long-term contracts, and European companies contacted by Reuters news agency confirmed the same last year.
But that has changed since the Russian-led invasion of Ukraine, which Moscow calls a “special military operation.”
This year, Moscow has cut off gas supplies to Bulgaria, Poland, Finland, Danish suppliers Orsted, the Dutch company Gasterra and Shell, all of which have rejected the Kremlin’s request to pay in rubles – in response to European sanctions.
Many companies such as Germany’s Uniper and RWE, as well as Italy’s Eni, have made payments under Russia’s new scheme and have continued to supply gas.
When Italian Prime Minister Mario Draghi accused Moscow of using gas for political purposes, Russia said smaller supplies were needed because of delays in returning equipment that had been sent for repairs.
Gas supplies from Russia to Europe, through three pipelines, fell by 26 percent in June, compared to May.
However, the reduction in quantity through North Stream 1 has had the greatest impact on large price increases.
What alternatives are there?
The European Union aims to end its dependence on Russian fuels by 2027 and has begun analyzing alternatives, such as increasing liquefied natural gas (LNG) imports.
The growth of imports of liquefied natural gas has gone to 58 percent in the first five months of 2022, compared to the levels of 2021, have shown the data of the company Refinitiv.
But Europe has limited capacity to receive liquefied natural gas, and the issue of supplies has become more troubling as Freeport LNG, the operator of a major export plant in the United States, said last week that it would take at least 90 days. to resume partial operation after an explosion days ago./REL
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