Russian supplier Gazprom to close gas tap to France on Thursday

The flow of Russian gas to France will be completely dried up on Thursday, after the Russian giant Gazprom announced on Tuesday evening that it would completely suspend its deliveries to the French group Engie on that date.

“Gazprom Export has notified Engie of a complete suspension of gas deliveries from September 1, 2022 until the receipt in full of the financial sums due for deliveries,” the Russian group said in a statement posted Tuesday evening on its Telegram account.

Under a decree by Russian President Vladimir Putin signed in late March, Gazprom says “it is forbidden to deliver more natural gas to a foreign buyer if the buyer has not made the payment in full within the period set in the contract.”

Now, Gazprom says it had not received the full amount due for July deliveries as of late Tuesday.

Engie, contacted by AFP on Tuesday evening, refused to comment on Gazprom’s announcement.

Other sources of supply

French Prime Minister Elisabeth Borne, wanting to “reassure Engie’s customers,” however, said that the French group had “found other sources of supply,” without specifying which, on the TMC channel.

Russian gas deliveries to Engie had already fallen considerably since the start of the conflict in Ukraine, recently dropping to just 1.5 TWh (terawatt hours) per month, according to the company formed by the merger of Gaz de France and Suez.

This figure is to be compared with “total annual supplies in Europe of more than 400 TWh” for Engie, adds the main gas supplier in France, in which the French state holds nearly 24%.

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At the end of July, Engie had assured that it had significantly reduced its “financial and physical exposure to Russian gas,” which already represented only about 4% of its supplies. “It is completely within the margin of flexibility of our portfolios, so we are not at all worried,” said its CEO Catherine MacGregor.

The group had recalled that measures had already been put in place to be able to supply its customers even in the event of an interruption in Gazprom’s flows.

Last Thursday, France’s gas reserves passed the 90% winter fill threshold (91.47% on Tuesday morning), according to the European Agregated Gas Storage Inventory (AGSI) platform, and France is on track to meet its 100% target by November.

“At the level of gas arrivals, we still see today injections that continue to be completely in line with our forecasts and will allow us to arrive at the entrance of winter with a filling rate that will be optimal for the entire French territory,” assured Tuesday to AFP Pierre Chambon, CEO of Storengy France, a subsidiary of Engie specialized in storage.

Not necessarily enough for the winter

French government spokesman Olivier Véran confirmed that the target would be met “by the end of the summer,” but warned that this did not mean that France would have “enough gas to get through the winter if the Russians cut it off and we consume a lot of it.”

A defense council dedicated to the country’s gas and electricity supply will be held Friday under the auspices of President Emmanuel Macron.

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“Between “pipeline maintenance” and “disagreements over the contract”, a winter with zero Russian gas is the main scenario for Europe,” says Simone Tagliapietra, a researcher at the Brussels-based Bruegel Institute.

Since Western countries imposed sanctions on Moscow after the launch of its offensive against Ukraine, Russia has repeatedly reduced its gas supplies to Europe, which is heavily dependent on it. Until last year, Russia accounted for some 40 percent of the European Union’s gas imports.

Gas prices have exploded on the Old Continent, nearing all-time highs in recent weeks (€345 per MWh in session) due to expected suspensions of Russian supplies between August 31 and September 2 via Nord Stream 1, because of maintenance on the pipeline, according to an announcement by Gazprom. Before the Russian invasion of Ukraine, it was around 80 € per MWh.