Russian gas flows to Germany rise despite Belarus threat

Gazprom said last week it was fulfilling its plan at underground European gas storage facilities and would exceed its obligations to transit 110 million cubic meters of gas per day via Ukraine this year.

Russian gas flows through a key pipeline to Germany rose on Monday with no sign that Belarus's president had acted on his threat to cut off supplies to the European Union as winter approaches. Targetting gas supplies that heat millions of homes across Europe, Belarusian President Alexander Lukashenko last week warned he could retalite against any new EU sanctions over a migrant standoff on the Belarus-EU border. This included shutting the Yamal-Europe gas pipeline that crosses his country.

Russia is a major exporter of natural gas to Europe via Belarus and the Kremlin has made it clear it does not want to see any disruption in supplies. European spot gas prices were up by 5.1% on Monday to 78.85 euros per megawatt hour, as market remains tight this year because of factors including low inventories and increased demand after the easing of COVID-19 lockdowns.

Until recently, lack of additional flows from Moscow - which was only delivering on its contractual volumes - was a major factor behind the surging gas prices, and the market is closely following any potential Russian flow disruptions. Russian state gas monopoly Gazprom started refilling its European storage facilities last week, with flows coming mainly via Belarus and Ukraine.

The gas transportation infrastructure in Belarus is owned by Gazprom. President Vladimir Putin said on Saturday that a move to block gas flows to Germany would risk harming ties between Minsk and its key ally Moscow, adding that he would speak to Lukashenko on the issue.

Flows into Germany at the Mallnow metering point, which lies on the Polish border, were up to an hourly volume of over 12,000,000 kilowatt hours (kWh) on Monday, data from German network operator Gascade showed, up from weekend volumes. Russia has said more gas could flow to Europe once its newly built Nord Stream 2 pipeline gets a green light from Germany to operate.

Nord Stream 2 is designed to bypass transit countries, particularly Ukraine which has a history of gas pricing standoffs with Moscow. The Kremlin said on Monday that a threat by Lukashenko to cut gas supplies would not result in Russia redirecting flows away from Belarus into the Nord Stream 2 once it is put into operation.

Nominations for Monday daily flows of Russian gas to the west on the Ukraine-Slovakia border were at 94.4 million cubic metres, 1 million megawatt hours, slightly up from 92.2 million cubic meters in the morning. Flows are similar to levels in the previous days. Gazprom said last week it was fulfilling its plan at underground European gas storage facilities and would exceed its obligations to transit 110 million cubic meters of gas per day via Ukraine this year.

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