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Gazprom declares "force majeure" on some European supplies from Reuters

Gazprom declares “force majeure” on some European supplies from Reuters

© Reuters. A screen with the Gazprom logo during the Saint Petersburg International Economic Forum (SPEF). Saint Petersburg, Russia, June 17, 2022.. REUTERS / Anton Vaganov /

LONDON (Reuters) – Gazprom has announced force majeure conditions for gas supplies to Europe for at least one of its major customers, according to a letter from the Russian company aimed at exacerbating European fears of fuel shortages.

The letter, dated July 14 and seen by Reuters, has legal value and protects Gazprom from fines due to supply disruptions, but risks exacerbating tensions between Russia and the West over an invasion of Ukraine that Moscow has designated a “special military operation”.

The letter states that Gazprom, which has a monopoly on Russian gas exports through the pipeline, has been unable to fulfill its supply obligations due to “extraordinary” conditions.

The force majeure clause, which was used to relieve the company of its contractual obligations due to factors beyond its control, had a retroactive effect on supplies as of June 14.

A trade source, who asked not to be identified due to the sensitivity of the matter, said the letter was about supplies via the Nord Stream 1 pipeline, an important supply route to Germany and beyond.

Gazprom had no immediate comment.

The Nord Stream 1 pipeline has been closed for annual maintenance, which is expected to be completed on July 21, but some Gazprom’s European customers are concerned that supplies will not resume.

One of those companies, Austrian oil and gas group OMV, said it expected to resume gas supplies from Russia via the Nord Stream 1 pipeline as planned after maintenance.

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OMV said in a statement that it could not comment on its operational contacts with Gazprom as part of its contractual relationships. An OMV spokesperson added that the group’s gas supply was about 70% less than what had been agreed.

turbine delay

Even before Nord Stream began maintenance on July 11, Gazprom cut exports via the under-Baltic pipeline to Germany on June 14, citing delays to a turbine being maintained in Canada by the equipment supplier.

Gazprom’s force majeure declaration went into effect on 14 June, relieving it of the obligation to provide any compensation for non-supply from that point onward.

The European Union, which has imposed sanctions on Moscow, aims to halt the use of Russian fossil fuels by 2027, but intends to continue receiving supplies for now while developing alternative sources.

Russian gas supplies have decreased via major transport routes, including Ukraine and Belarus, and via Nord Stream 1 under the Baltic Sea.

(Translated by Chiara Scarciglia, Editing by Gianluca Cimraro)