Gazprom Declares Force Majeure On Some Gas Deliveries To Europe

Gazprom has declared force majeure on gas deliveries to at least one major customer in Europe, which would protect the Russian giant from compensation payments for unrealized deliveries, Reuters reported exclusively on Monday, quoting a Gazprom letter it had seen.

Gazprom cannot fulfill its supply obligations due to “extraordinary” circumstances, says the letter dated July 14 and seen by Reuters. The force majeure Gazprom declares in the letter is about supply via Nord Stream, the key Russian gas export route to Germany, a trading source told Reuters today.   

This force majeure could further worsen the gas row between the EU and Russia, which has already slashed supply to major customers, including Germany and Italy. Russia claims a delay in the return of a repaired turbine due to the Western sanctions on Moscow prevents the reliable operation of a Nord Stream compressor station, for which the turbine was intended.

According to Russian daily Kommersant, Canada sent the gas turbine that was being repaired in the country on a July 17 flight to Germany, from where the equipment will need another five to seven days to reach Russia if there are no logistics or customs problems. The turbine is expected to be transported via ferry from Germany onto Helsinki in Finland and on land into Russia, according to Kommersant’s sources. The turbine is expected to arrive in Russia around July 24 but could take another three to four days to commission and install. Thus, the turbine is expected to be ready to pump gas in early August, Kommersant reports.

Currently, no Russian gas flows via Nord Stream as the pipeline is undergoing regular two-week maintenance until July 21. Germany and other EU member states are concerned that Russia may not resume gas supply via Nord Stream once the maintenance period ends, and the EU is scrambling to secure alternative supplies to avoid a winter of rationing.   

By Charles Kennedy for Oilprice.com

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