Belarusian leader’s warning causes new concern in Europe about gas flows

By Katya Golubkova and Marwa Rashad

MOSCOW/LONDON (Reuters) – A warning by Belarusian President Alexander Lukashenko that he could halt Russian gas flows through his country to Europe in a dispute with the European Union posed a new threat to already tight European supplies on Thursday.

Lukashenko made his comments as the EU geared up to impose new sanctions on Belarus after accusing Minsk of mounting a “hybrid attack” on the bloc by encouraging migrants to try to cross into EU territory. Belarus denies the charge. Lukashenko’s remarks raised new concerns about the supply squeeze and high prices in Europe, which have hit consumers and industry alike, as the Yamal-Europe pipeline that carries Russian natural gas to Germany passes through Belarus.

Uncertainty in Europe about Moscow’s intentions remains, and Russian gas flows on the Yamal-Europe pipeline halved from Wednesday to Thursday. “We are heating Europe, they are still threatening us that they will close the border. And if we shut off natural gas there? Therefore, I would recommend that the Polish leadership, Lithuanians and other headless people think before speaking,” Lukashenko said.

In a sign of concern about the situation, a European benchmark futures contract – the Dutch front-month contract – rose 3.3% at one point on Thursday morning. Reverse flows on the Yamal-Europe pipeline last week, meaning gas flowed towards Poland instead of westbound into Germany, worsened a supply squeeze in Europe and drove up prices for industry and consumers alike.

After an order by Russian President Vladimir Putin, supplies resumed late on Monday, hitting a week’s high on Wednesday as Russian state exporter Gazprom refilled its European storage. Flows into Germany at the Mallnow metering point on the Polish border were around 7.79 million kilowatt hours (kWh) per hour on Thursday morning, nearly half the average levels seen on Wednesday, preliminary data from German network operator Gascade showed.

At one point on Wednesday, the hourly entry flows at the Mallnow point were as high as 15.2 million kWh. Exit flows at Mallnow – or gas transportation into Poland from Germany – were at zero, the preliminary data showed. On Tuesday, Gazprom said it started to refill its European gas storage – a factor which eased spot prices in the region.

Meanwhile, nominations for Thursday’s flows of Russian gas to the west at Velke Kapusany on the Slovak-Ukraine border stood at 92.1 million cubic metres, or 999,700 megawatt hours, just off this year’s highs nominated for Wednesday, website data from the Slovak transmission system operator Eustream showed.