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US, EU warns of giving in to Russian “gas oppression”

The United States and the European Union have warned against giving in to Russian so-called “blackmail” over gas supplies to Europe.

Russia, which accounts for about 40 percent of Europe’s gas needs, had demanded that what it called “unfriendly” European countries pay its gas bills in rubles – seen as a way to support the currency in the face of Western sanctions against Russian banks, including its central bank. Some EU countries have set up Russian bank accounts to try to circumvent sanctions.

President Joe Biden said on Thursday that the United States was helping its European allies diversify their gas reserves.

“We will not intimidate or coerce Russia out of these sanctions. We will not allow them to use their oil and gas to avoid consequences for their aggression. “We are working with other nations such as Korea, Japan, Qatar and others to support our efforts to help European allies that Russia threatened with gas oppression and their energy needs in other ways,” Biden told White House reporters.

“Aggression will not win. Threats will not win. “This is just another reminder of the need for Europe and the world to move more and more of our energy needs to clean energy,” he said.

The Prime Minister of Poland, Mateusz Morawiecki, speaks at a press conference near the Gas-System gas-pumping station in Rembelszczyzna, outside Warsaw, Poland, on April 27, 2022.

Cut off

Russian state gas giant Gazprom closed supplies to Poland and Bulgaria on Wednesday after refusing to pay in rubles. The two EU member states demand that the agreements provide for payment in euros.

“This time, Russia has pushed the borders of imperialism – gas imperialism – one step further. This is a direct attack on Poland, “said Polish Prime Minister Mateusz Morawiecki on Thursday as he visited the Zambrow gas station, which receives gas from Russia.

“Thanks to our actions, Poland will not need Russian gas at all from the autumn. But we will also deal with this blackmail, with this gun to the head, so that the Poles will not feel it, “Morawiecki added.

When Bulgarian Prime Minister Kiril Petkov visited the Ukrainian town of Borodyanka yesterday, he said his country could survive without Russian gas.

“Bulgaria will not be indifferent to this tragedy. We are in the firm position, as part of the democratic world, as part of the European Union, that we will stand with Ukraine. Because this is not just the battle of Ukraine, this is a civilian choice. “Which side do we want to stand on,” Petkov told reporters.

Diverse supply

Poland and Bulgaria had refused to extend their gas contracts with Gazprom beyond this year. Both are diversifying their supply of pipelines and liquefied natural gas (LNG), said Tom Marzec-Manser, head of gas analysis at Independent Chemical & Energy Market Intelligence.

“Given that they were terminating these agreements, they had already started investing in new infrastructure, or developing infrastructure, or signing new pipeline or LNG agreements to replenish the amount lost in early 2023. either way. So Poland will get a new pipeline that connects it directly to Norway. “There is another pipeline between Greece and Bulgaria that will specifically transport gas from Azerbaijan,” Marzec-Manser told VOA.

“Polish storage is incredibly large at the moment and therefore it looks like they were prepared for something like this to happen,” he said.

German Chancellor Olaf Scholz, left, and his Japanese counterpart, Fumio Kishida, join forces after inspecting an honor guard for their bilateral meeting at the Prime Minister's Office in Tokyo on April 28, 2022.

German Chancellor Olaf Scholz, left, and his Japanese counterpart, Fumio Kishida, join forces after inspecting an honor guard for their bilateral meeting at the Prime Minister’s Office in Tokyo on April 28, 2022.

Serious sanctions

Many other European countries continue to import Russian gas. Several European gas companies – including those from Germany, Austria, Hungary and Slovakia – have, at Moscow’s request, opened accounts with Gazprom Bank in Switzerland. The contracts are paid in euros but immediately converted into rubles.

German Chancellor Olaf Scholz during a visit to Tokyo on Thursday told reporters that his country could not risk losing Russian gas supplies in the short term.

“Every disruption would have consequences for the economic situation. It is clear and the government is also very clear about it, “Scholz told reporters.

“We know that it is a challenge that many European countries, including Germany, are dependent on imports of mineral resources from Russia. And that’s why we set out very early, even long before this war broke out, to actually analyze this situation and make decisions based on it.

“This has put us in a position where we can now stop importing [Russian] coal with the fall. It will put us in a position to reduce and replace coal imports little by little. And the same thing will happen for gas. But this is a process that will require more time, “said Scholz.

EU warning

Ursula von der Leyen, President of the European Commission, warned MPs not to give in to Russia.

MATTERS - Ursula von der Leyen, President of the European Commission, delivers a speech at the European Parliament in Strasbourg, eastern France, on 20 October 2021.

MATTERS – Ursula von der Leyen, President of the European Commission, delivers a speech at the European Parliament in Strasbourg, eastern France, on 20 October 2021.

“Companies with such agreements should not comply with Russia’s requirements. This would be a violation of sanctions. Such a great risk for the companies, “she said on Wednesday.

It is not yet clear whether these gas companies will be penalized for directing payments through Gazprom Bank. Marzec-Manser said Russia was facing problems.

“Had a large German or Italian gas customer had contracts that not only expire at the end of this year but, for example, contracts until 2035, if they had not agreed to change bank setup, would they have been suspended? “Because the revenue impact on Gazprom would have been huge,” he said.

Russia’s reputation has also broken through, Marzec-Manser added.

“Until about a year ago, the reputation of the gas market was considered reliable,” he said. “It is a long time ago, even before the Ukraine war, I would say.”

European nations say they are preparing if Russia turns off the gas station. But experts say such a move would also cost the Kremlin hundreds of billions of dollars a year in lost revenue.

US, EU warns of giving in to Russian “gas oppression”

Source link US, EU warns of giving in to Russian “gas oppression”

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