Ukraine Invasion: Ukraine Disrupts Gas Deliveries to Europe for First Time

Gas flows into Europe from Russia were put under further pressure on Tuesday after a key pipeline in Ukraine was closed, a new market note sent to Rigzone has outlined.

In the note, Rystad Energy analyst Zongqiang Luo highlighted that Ukraine had disrupted gas deliveries to Europe for the first time, declaring force majeure. While alternative pipelines can take a significant amount of the lost capacity, this is another cut in Europe’s ability to import Russian gas, Luo stated in the note.

“Bulgaria and Poland are already cut off from Russian supplies and with the key transit Sokhranivka pipeline now closed, up to a third of Europe’s gas supplies could be disrupted,” Luo said in the note.

“As previously stated, the most realistic scenario of a complete halt in gas exports from Russia to Europe would be if infrastructure were attacked, … this decision is a small preview of what might happen if gas installations are hit by live fire and face the risk of extended downtimes,” Luo added.

“The knock-on effect of removing a further pipeline from Europe’s gas grid and the loss of 10 mcm/d of gas flow per day will make it harder for countries to meet their storage targets and hasten Europe’s plans to move away from imports of Russian gas,” Luo continued.

Luo outlined that, as the European gas grid is well integrated, no one country is likely to suffer any immediate impact, but added that this will put further strain on the system and place a floor on downside price movement.

Please Comment and Share