Ukraine cuts flow of some gas to Europe

Operator says presence of occupying forces at one of two entry points has forced its closure

Ukraine and Russia have clashed over natural gas sent through pipelines to Europe in a dispute that could disrupt supplies from the former Soviet Union nation for the first time since the war started.

The Gas Transmission System Operator of Ukraine said Russian gas flowing via one of two key entry points would stop from yesterday as occupying forces disrupted operations, according to a statement on its website.

The network manager said the fuel could still be diverted to avoid a supply interruption.

But Russian gas giant Gazprom said that the switch was not possible because of how its system worked.

Russia has been sending gas via Ukraine normally despite the conflict, but Kyiv had already warned Moscow that the actions of its troops and occupiers in the Luhansk region of eastern Ukraine could end up halting about a third of the gas it exported to Europe.

Ukraine’s gas network manager said on Tuesday that it could not meet its contractual obligations to receive Gazprom supplies via the Sokhranivka border point.

A Gazprom spokesman said the company was notified by Ukraine of the pending disruption, but did not receive any confirmation of force majeure.

European gas traders remain on edge even though prices have eased recently thanks to a steady stream of liquefied natural gas cargoes arriving in the region and warm weather.

Russia supplied about 40 per cent of the European Union’s gas demand last year, and about a third of that was sent via Ukraine, making it a linchpin in the continent’s energy security.

European gas prices surged as much as 8.1 per cent on Tuesday, reversing earlier losses. Prices then pared gains to close 5 per cent higher at US$104 a megawatt hour.

Ukraine’s gas grid operator said it could no longer accept Russian gas transited via Sokhranivka from yesterday. It added that flows could be diverted via Sudzha, a suggestion Gazprom rejected.

“Ukraine doesn’t bear responsibility for gas transit via Russiaoccupied territories and Gazprom was properly informed about that,” Ukrainian state-run energy company Naftogaz said in a statement on its website.

Naftogaz said it offered to divert the gas, a switch that it said presented no technical difficulties and did not involve additional costs for Russia.

Ukraine could guarantee the safe transport of gas only via territory it controlled, which was why it offered to divert, Naftogaz said.

Sokhranivka and Sudzha are two key points on the border between Russia and Ukraine that receive flows from Gazprom for transit to Europe. As of Tuesday, 27 per cent of the flows went through Sokhranivka, with the rest passing through Sudzha.

Gazprom said it saw no issue with sending gas via Ukraine as usual, and that it was meeting all obligations to European clients.