Gazprom is preparing to cut off supplies to Engie. The flow of Russian gas to France will be completely dried up on Thursday, after the announcement Tuesday evening by the Russian giant Gazprom of the total suspension on that date of its deliveries to the French group Engie.
Gazprom will no longer deliver gas to Engie
A dispute between energy companies
The gas supply dispute between Engie and Gazprom intensified on Tuesday evening. The Russian company has announced that it will stop deliveries to Engie as of September 1. At issue is the latter’s failure to pay for all deliveries made in July.
In fact, Engie has deducted from the payment a “compensation” for the decrease in gas supplies in recent weeks. However, the source interviewed did not quantify the amount deducted. She only added that it was too early to say whether the dispute between the two companies would be resolved quickly.
A consequence of a dispute between states
Since the beginning of the war in Ukraine, European governments have accused Russia of instrumentalizing energy supplies and using them as a “weapon of war”.
Agnès Pannier-Runacher, the French minister of energy transition, said:
“As we predicted, Russia is using gas as a weapon of war. It is using Engie as a pretext to further reduce supplies to France.”
Nevertheless, Moscow invokes the impact of Western sanctions to justify technical failures that force it to reduce supply.
In July, Gazprom carried out ten days of maintenance work on Nord Stream 1. After the shutdown, the company reopened the tap but reduced the quantities delivered to 20% of the pipeline’s capacity. This time, Russia stopped gas deliveries via the Nord Stream 1 pipeline between August 31 and September 2.
The Western response
Engie, an energy company prepared for this scenario
Russia now represents less than 4% of Engie’s gas imports, compared to 17% before the war in Ukraine. In fact, Engie has diversified its supply in anticipation of a possible halt in Russian gas deliveries. The company has turned to its traditional suppliers, including Norway, Algeria, Qatar and the United States.
In addition, the multinational has assured that it has anticipated this scenario by putting in place measures to be able to supply its customers, including in case of interruption of Gazprom’s flows.
Diversification of French and European supplies
European governments fear further supply cuts. These are likely to worsen the energy crisis that has already increased wholesale gas prices by 400% since August 2021.
European governments are therefore betting on diversifying their supplies. France, for example, has reduced its exposure to Russian gas imports to 9%, down from 17% before the war.
In addition, Agnès Pannier-Runacher comments:
“France has been preparing for this scenario since the spring. The filling of gas stocks should reach its peak in about two weeks.”
These issues will be discussed this Friday, September 2, at a defense council devoted to the supply of gas and electricity to the country.
