Natural-Gas Prices Rise in Europe After Ukraine Cuts Flows

The gas receiving station of the Nord Stream 1 pipeline in Lubmin, Germany.


Photo:

Stefan Sauer / Zuma Press

Natural gas prices in Europe rose on Wednesday after Ukraine said it would reduce flows from Russia through its territory, as Russian forces interfered with pipelines in the east of the country.

Futures on natural gas in the Netherlands, the European standard for a fuel widely used in home heating, industrial processes and power generation, increased by 5, 4% to 98.80 euros, or $104.21, a megawatt-hour.

Europe has ramped up energy supplies ahead of a planned EU-wide embargo on Russian oil, which will be lifted this week. Some member states, notably Germany, have also scrambled to find alternative gas supplies amid the threat of Moscow cutting off gas exports. Despite these moves, Europe remains heavily dependent on Russian gas, a source of gas that flows through Ukraine.

A spokesman for Gazprom PJSC, Russia’s giant gas supplier, did not immediately respond to a request for comment.

Ukraine’s Gas TSO, which operates the country’s pipeline network, said on Tuesday it would stop gas flowing through a transit point in the Luhansk region of the Donbas, which accounts for about a third of gas exports. Russian exports to Europe via Ukraine. The company said Russian forces interfered with engineering processes at critical pipeline infrastructure, including gas extraction.

Russia is pursuing a strategy to capture the entire Donbas region, eastern Ukraine.

The pipeline operator said more gas could flow through the separate Sudzha feeder to offset the drop in flow.

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Edmund DeMarche

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