Putin denies Russia is restricting gas supplies to Europe.

Russian president Vladimir Putin has said the country is meeting all requests for gas supplies from Europe, vehemently denying that state-run monopoly Gazprom was limiting supplies to the continent to drive up prices.

He told an energy conference in Moscow that accusations Gazprom was using energy as a “weapon” to speed up approval of the recently built Nord Stream 2 pipeline to Germany were “politically motivated blather”. He said the company had already exceeded its contractual obligations to the bloc.

“We’re increasing [supply] as much as our partners ask. There hasn’t been a single refusal. Not one,” said Mr Putin.

He also said Russia was targeting achieving carbon neutrality by 2060, underlining the Kremlin’s growing appreciation of the threat from global warming.

Russia, whose Arctic region is warming three times faster than the global average, has gradually begun to address the threat from changing climate after years of questioning whether greenhouse gases were causing the planet to warm.

But Mr Putin also said that natural gas, as well as hydrogen and ammonia, would play a greater role in the energy mix, implying that Russia would continue to exploit its huge natural resource base.

Russia supplies 40 per cent of Europe’s gas.

Mr Putin tempered surging gas price rises last week by saying Russia was prepared to intervene to stabilise a “speculative craze” on volatile energy markets. The country has limited pipeline gas sales to exports under long-term contracts this year, a move that industry insiders have said has contributed to low levels of gas storage in Europe ahead of the winter months, when demand rises sharply.

Gas analysts have said that while Gazprom has fulfilled long-term contracts it has let its own storage facilities in Europe fall to low levels, contributing to the tightness in supplies.

Russia in no rush

Deputy energy minister Evgeny Grabchak said on Wednesday that Gazprom would continue filling domestic storage facilities until November 1st, a sign that Russia was in no rush to divert supplies to Europe.

European gas prices have eased slightly since Mr Putin’s comments last week, but are still well above previous years. The benchmark contract for November delivery was trading above €90 per megawatt hour on Tuesday, more than 5½ times the level of a year ago.

The International Energy Agency, which is primarily funded by Organisation for Economic Co-operation and Development members, said last week it believed Russia could increase exports to Europe by about 15 per cent and has called on Moscow to demonstrate that it is a “reliable supplier”.

Mr Putin indicated on Wednesday that no additional gas was likely to be sent to Europe in the short term, however, arguing that Russia has already reached capacity for sending exports under current routes.

Extra supplies will probably have to come from new long-term pipeline contracts, rather than the spot market mechanisms favoured by the EU, he added.

Mr Putin said Nord Stream 2, which bypasses Ukraine to supply gas to Germany, would help “significantly relieve tensions on the energy market, and that would have an effect on prices” if it were approved by German regulators.

But he said it was being held up by EU “red tape”, including a requirement that Gazprom surrender its monopoly on Russian gas exports and give third parties access to 50 per cent of the pipeline. – Copyright The Financial Times Limited 2021

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