European gas prices reach record highs as flows on key pipeline move towards Russia
European gas prices climbed to record highs, as flows on the Yamal-Europe pipeline moved eastwards towards Russia today,
The front-month wholesale Dutch gas price, the European benchmark, rose more than 16 per cent to a record high of €171.40 per megawatt hour on Tuesday, while British gas contracts hit a new peak of £4.29 per therm.
The Kremlin denied the reversal in flows on the Yamal-Europe pipeline had no political backdrop .
Spokespersons for two of Gazprom’s biggest German buyers, RWE and Uniper, told Reuters the state-backed gas giant was still meeting delivery obligations.
Westward gas flows through the Yamal-Europe pipeline, one of the major routes for Russian gas to Europe, had been falling since Saturday, according to data from network operator Gascade.
After stopping early on Tuesday, flows reversed direction later in the day.
Yamal flows are expected to stay in the reverse mode at the Mallnow metering point on the German-Polish border at an hourly volume of over 1,250,000 kilowatt hours (kWh/h) for the rest of Tuesday.
This is not the first time flows have moved eastwards on the pipeline amid market disruption this year.
Russia has faced criticism from the International Energy Agency over the shortages of energy supplies, while industry experts and politicians have accused the country of withholding gas deliveries to Europe amid political tensions over Ukraine, alongside delays in the certification of the Nord Stream 2 pipeline.
These claims have been consistently denied by The Kremlin – who said the eastward flows were commercially motivated.
Kremlin spokesman Dmitry Peskov said: “There is absolutely no connection to Nord Stream 2, this is a purely commercial situation.”
Gazprom also recently reported export growth into Europe has slowed to less than five per cent in its full-year results.
It is now looking to use strategic reserves to continue supplying European customers, amid fears of blackouts on the continent.
The energy giant has been booking extra capacity at auctions for delivery via Ukraine and to Germany via the Yamal route when it sees requests.
However, it had not booked capacity for exports via Yamal for Tuesday.
Russia is currently responsible for 35 per cent of Europe’s natural gas supplies.
In October, Russian President Vladimir Putin dismissed accusations it was using gas supplies as a weapon as “politically-motivated blather.”
The country is set for fresh talks with the US over tensions in Ukraine, with Moscow amassing 175,000 troops nears its border, while Nord Stream 2’s certification in Germany has been pushed back due to concerns over governance.