Natural Gas Prices in Europe Jump

Natural gas prices in Europe rose after Ukraine’s state-owned grid operator halted Russian deliveries through a vital entry point.

Gas, The Ukrainian TSO, declared force majeure on Tuesday; under unexpected circumstances that preclude contract fulfillment; The first statement of its kind since Russia invaded Ukraine on February 24. It said on Wednesday that it would no longer accept flows through its Sokhranivka entry point; it transports Russian gas to Europe. The operator has also halted gas transport through its border compressor station Novopskov; it transports nearly a third of Russian gas (up to 32.6 million cubic meters per day) to Europe. European natural gas prices were up more than 6.4 percent.

As a result of Russia’s military activity against Ukraine, some GTS facilities locate in territory controlled by Russian forces and the occupation authority. GTSOU currently lacks operational and technological control over the CS ‘Novopskov’ and other assets in these territories. Furthermore, the occupying forces’ meddling in technical processes and changes in the modes of operation of GTS facilities, including unauthorized gas offtakes from gas transit flows, jeopardized the overall stability and safety of the Ukrainian gas transportation system.

The corporation regularly warned Gazprom about gas transit threats caused by Russian-controlled occupying forces; it emphasizedd the importance of not interfering with the operation of the facilities, but these appeals ignore. The possibility of Russia cutting off natural gas supplies to Europe has pushed the European Union to intensify its quest for alternative suppliers, with Russia accounting for around 40% of all EU natural gas imports. According to a seasoned natural gas dealer, economists and traders have warned that a full-fledged energy blockade may have disastrous consequences for pricing and inflation.