Ukraine to Halt Key Russian Gas Transit to Europe, Use Alternative

[bluewater]

Source: USNews/Reuters

LONDON (Reuters) -Ukraine said on Tuesday it would suspend the flow of gas through a transit point which it said delivers almost a third of the fuel piped from Russia to Europe through Ukraine, blaming Moscow for the move and saying it would move the flows elsewhere.

GTSOU, which operates Ukraine's gas system, said it would suspend flows via the Sokhranivka route from Wednesday, declaring "force majeure", a clause invoked when a business is hit by something beyond its control.

The company said in a statement that it could not operate at the Novopskov gas compressor station due to "the interference of the occupying forces in technical processes", adding that it could temporarily shift the affected flow elsewhere, to the 'Sudzha' physical interconnection point located in territory controlled by Ukraine.

But Gazprom, which has a monopoly on Russian gas exports by pipeline, said it was "technologically impossible" to shift all volumes to the Sudzha interconnection point, as GTSOU proposed.

Read more: https://www.usnews.com/news/top-news/articles/2022-05-10/ukraine-operator-to-suspend-russian-gas-flow-via-sokhranivka-entry-point?msclkid=ad830abdd09311ecbb607eb911ae2025

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This impacts "almost a third of the fuel piped from Russia to Europe through Ukraine".

Good lord.

"The Russian company added that Ukraine proposed switching all gas transit to Sudzha, adding that it saw no proof of force majeure or obstacles to continuing as before."

Why is Ukraine doing this?

This damages all the EU countries that have been backing Ukraine with weapons and financial support.

[ColinC]

1. They probably wouldn't have done it unless they know Europe has enough alternatives

They could have done this in February, but didn't. Probably because they wanted Europe to prepare properly.

[bluewater]

2. Is this some sort of pressure tactic on the part of Ukraine?

To get more support from the EU, like NATO support in opening the Black Sea ports for Ukrainian grain shipments?

In any case, the actual impact on the EU will become clear shortly.

[GregariousGroundhog]

3. Alternatively, something may have forced their hand

Novopskov is currently occupied by the Russians, but it's hard to make out what exactly "the interference of the occupying forces in technical processes" means exactly. The Novopskov gas compressor station may need maintenance that the Russian's are preventing, there could be interruptions in internet or electrical connectivity to the site, or there could be other interface going on. We just don't know.

[bluewater]

4. Since the gas comes from Russia to start with, what is the new issue?

The pipelines start in Russia and have run thru occupied areas already.

What's different now?

Gazprom said it had received notification from Ukraine that the country would stop the transit of gas to Europe via the Sokhranivka interconnector from 0700 local time on May 11.

The Russian company added that Ukraine proposed switching all gas transit to Sudzha, adding that it saw no proof of force majeure or obstacles to continuing as before.

Gazprom added that it was meeting all obligations to buyers of gas in Europe.

https://www.usnews.com/news/top-news/articles/2022-05-10/ukraine-operator-to-suspend-russian-gas-flow-via-sokhranivka-entry-point?msclkid=ad830abdd09311ecbb607eb911ae2025

I am baffled.

[GregariousGroundhog]

5. We don't know

The only thing the article states is that Ukraine is having difficulty operating the Novopskov gas compressor station. The Russians control Novopskov, but we don't know what difficulty they are causing on the operations of that station.

[bluewater]

6. We know the Russians are saying flow should continue as before. Ukraine says it will shut it down.

It is the first compressor in the Ukraine gas transit system in the Luhansk region, the transit route for around 32.6 million cubic metres of gas a day, or a third of the Russian gas which is piped to Europe through Ukraine, GTSOU said.

GTSOU said that in order to fulfill its "transit obligations to European partners in full" it would "temporarily transfer unavailable capacity" to the Sudzha interconnection point in territory which is controlled by Ukraine.

Gazprom said it had received notification from Ukraine that the country would stop the transit of gas to Europe via the Sokhranivka interconnector from 0700 local time on May 11.

The Russian company added that Ukraine proposed switching all gas transit to Sudzha, adding that it saw no proof of force majeure or obstacles to continuing as before.

Gazprom added that it was meeting all obligations to buyers of gas in Europe.

https://www.usnews.com/news/top-news/articles/2022-05-10/ukraine-operator-to-suspend-russian-gas-flow-via-sokhranivka-entry-point?msclkid=ad830abdd09311ecbb607eb911ae2025

Why is Ukraine taking this unprecedented step now?

For Ukraine to announce in advance that they would be shutting down this gas pipeline seems against their own interests and those of the entire EU.

The Russians claim that there are no obstacles to continuing gas flow, so why would Ukraine announce they are commencing a shut down on May 11th instead of proving the Russians are lying and are the one's interfering with the supply?

I imagine the EU will comment on this issue very shortly.

[taxi]

15. They would have to announce it.

When the electric, in this case the gas, suddenly gets cut off it is the customers that feel the pain and not the corporate office. Remember when Cancun Cruz fled to Mexico, nice and warm in the sun? Ukraine and Zelensky wouldn't act that way. As far as there being obstacles or not depends on whose obstacles they are. If Russia had two ways to get the fuel to Sudzha, a pipeline going directly there and a much larger pipeline that goes through Sokhranivka then to Sudzha, it would be no fault of Ukraine's if the Russian line to Sudzha was inadequate for whatever reason. Were the Russians able to get the fuel to Sudzha there wouldn't be a problem. Russians invaded and are taking land, buildings, farms, gas lines, and more.

[Lonestarblue]

12. If it's anything like the problems ignorant Russian soldiers caused at the nuclear radiation site,

there could be serious maintenance issues that soldiers are preventing Ukrainian technicians from addressing.

[bluewater]

14. Could be.

But isn't pooty poot dependent on the gas money to keep afloat?

You would think the Russian would want to sell as much gas as possible and would make sure the pipelines stayed intact.

I mean, they do start in Russia after all and have been running through occupied territory for months already.

[qazplm135]

7. not sure this is the big deal

you are making it out to be.

Most of the EU has already said they are prepared to go off Russian oil completely.

[bluewater]

8. You are conflating EU oil supply needs and natural gas supply needs.

The EU remains extremely dependent on Russian natural gas. Russian oil is a smaller and separate issue.

As for how big a deal this is, well, I imagine the EU countries impacted will let us know soon.

[qazplm135]

9. still tied together

but if you want to freak out, feel free, don't think it's a big deal or likely to be a big deal.

[bluewater]

10. "don't think it's a big deal or likely to be a big deal" An 8% jump in gas futures today disagrees.

European gas futures jumped by more than 8% on Ukraine’s warning that gas flows to Europe could be disrupted.

https://oilprice.com/Latest-Energy-News/World-News/Russian-Gas-Flows-To-Europe-Via-Ukraine-To-Stop-Wednesday.html?msclkid=d6a4b8eed09c11eca58488f89ba69d3c

Hmmm.


"but if you want to freak out, feel free,"

Um, ok. Thanks for your permission.

[paleotn]

20. .......

[qazplm135]

22. a whole 8 percent

well it's Armageddon for sure!

https://tradingeconomics.com/commodity/eu-natural-gas

An 8 percent jump is nothing looking at this chart which shows jumps three times as high multiple times just this year.

[bluewater]

28. Sure, the price jumped more WHEN RUSSIAN TANKS ROLLED UP TO Kyiv lol

March 6, 2022·2 min read

Investing.com -- European natural gas futures surged some 25% in early trading on Monday to new record highs, amid talk of tighter sanctions on Russian energy exports.

https://finance.yahoo.com/news/european-natural-gas-prices-surge-030116100.html?msclkid=12dab6f3d0c011ecbcb460bd118fd030

That was the March 6th spike on your chart when the Russian Invaders reached the outskirts of Kyiv.

Natural gas prices in Europe exploded on Tuesday, December 21, 2021, after a major pipeline that brings Russian gas to Europe slowed output over the past couple of days and completely stopped delivering on Tuesday. This combined with record-high prices of electricity after France closed 4 of its largest nuclear reactors last week, low wind energy output, and cold weather to further deteriorate Europe's energy stability ahead of very cold Christmas and New Year.

https://watchers.news/2021/12/22/natural-gas-prices-in-europe-explode-to-all-time-highs-as-major-russian-flow-stops

That was the December 21 2021 spike on your chart "after a major pipeline that brings Russian gas to Europe slowed output over the past couple of days and completely stopped delivering"...


And, hey, all those spikes had build ups before they reached their top, right?

Today's 8% increase is on par with, if not greater than, the increases several days prior to the peak of those previous spikes.

At least that's what your chart show, right?



But, sure, gas prices went thru the roof the last two times investors were worried about cuts in Russian energy exports BUT maybe that won't happen THIS time, hmmm?



Time will tell in any case. Let's see how this develops.

[qazplm135]

32. I mean

There's more than just those two but at least you ended with a reasonable sentence.

[paleotn]

17. For some, freak out seems their favorite hobby.

[oldsoftie]

11. Well, it IS getting warmer now.

[bluewater]

13. In more ways than one, it seems...

[Lancero]

23. Yeah, pity that Ukraine can't ensure the safety of that line while their country is actively...

Being invaded.

If the line is that critical to the EU, they can deploy military forces to take over securing it.

[bluewater]

29. "If the line is that critical to the EU, they can deploy military forces to take over securing it."

Yes! Exactly!

I have been urging more direct NATO involvement for months now.

Check out my journal for my previous OP's on that.

[ornotna]

16. Russia attacking Ukraine certainly looks like "force majeure" to me.

Or, we could believe Gazprom.

[paleotn]

18. Stop it.

You're making sense.

[Lancero]

25. Gas it the only thing some nations and people care about.

For all they care, Russia can turn Ukraine into a ocean of blood so long as the gas continues to flow.

[paleotn]

27. Unfortunately, that is true.

[paleotn]

19. ......

[Xolodno]

21. Desperation.

Remember they wanted a NATO no fly zone, force the ports open, etc. But NATO has stated that is a bridge too far to cross. Recently read that Biden chastised our intelligence leaks for helping them pinpoint Generals, where their forces were moving to, etc. As it plays into Putin's statement about NATO being an aggressor.

Also read a story today that its going to take a year for the USA to restock our Javelin anti tank weapons. And we already lost some military equipment in Afghanistan during the pull out and Iraq insurgency. So they know the spigot is going to get a bit smaller eventually. And Ukraine can't afford to take many losses so it needs to be replenished. And with Biden quickly getting aide to them with an emergency bill, tells me they we're getting close to running on empty.

Pulling military equipment from other NATO nations however, has been like pulling teeth. Can't blame them, they have smaller stockpiles and need to keep operational just in case Putin really is crazy.

And this war will end. But when it does, the country is going to be devastated. Infrastructure needs to be rebuilt, they need to entice those that fled to come back and help rebuild (not all of them will), etc. They are going to be in an economic coma for awhile.

So they do this, in the hopes of being more convincing. More military equipment = we can retake Novopskov.

[Lancero]

24. Ukraine can't ensure the safety of the line while being actively invaded.

All things considered, it's a damn miracle they've been able to secure it for so long as they have.

[Beastly Boy]

26. The Sokhranivka junction is occupied by the Russian forces

GTSOU (Gas Transmission System of Ukraine) is a company that is in charge of the gas flow through the territories of Ukraine. The company claims they lost operational and technological control of their operation due to Russian occupation of the facilities:

As a result of the Russian Federation’s military aggression against Ukraine, several GTS facilities are located in territory temporarily controlled by Russian troops and the occupation administration. Currently, GTSOU cannot carry out operational and technological control over the CS “Novopskov” and other assets located in these territories. Moreover, the interference of the occupying forces in technical processes and changes in the modes of operation of GTS facilities, including unauthorized gas offtakes from the gas transit flows, endangered the stability and safety of the entire Ukrainian gas transportation system.

These actions under the current transit contract are force majeure circumstances that make it impossible to fulfill obligations at the physical interconnection point GMS “Sokhranivka” and at the border compressor station “Novopskov,” which are not currently controlled by GTSOU

snip

The company repeatedly informed Gazprom about gas transit threats due to the actions of the Russian-controlled occupation forces and stressed stopping interference in the operation of the facilities, but these appeals were ignored..

https://tsoua.com/en/news/the-actions-of-the-occupiers-led-to-the-interruption-of-gas-transit-through-the-gms-sokhranivka/

Ukraine is not doing this. Russia is. This is not a capricious decision. It is due to the loss of operational control of the infrastructure to the occupying forces.

[bluewater]

30. "It is due to the loss of operational control of the infrastructure to the occupying forces."

Which has been true since about the first week of the invasion back in February.

That border crossing and facilities are in the northeast of Luhansk oblast, which had been occupied early on.

What precipitated Ukraine's action today, months after the fact?

[Beastly Boy]

31. The fact of being occupied should not be confused with the fact of losing control.

Two different facts. Apparently, GTSOU was able to maintain control of the facilities in Sokhranivka while being occupied by Russia. Until recently. The action taken today occurred months after the fact of being occupied, but likely just days after the fact of losing operational and technical control. The extent to which GTSOU can exercise control under the occupation by a foreign force is dictated entirely by the occupying force, not GTSOU.