Russia says it halted gas exports to Poland and Bulgaria. But turning off the taps might not be so easy
Russia really wants its gas customers to start paying in rubles.
On Tuesday, Russia’s state-owned Gazprom announced it had suspended gas exports to Poland and Bulgaria after both countries refused to pay for Russian gas in rubles, as per a requirement President Vladimir Putin made in March. Bulgaria lambasted Moscow’s export ban as “blackmail” while Russian gas flows into Poland dropped to zero on Wednesday morning.
However, after appearing to drop off entirely, data from the European Union showed that gas imports from Russia eked back up from zero during the day. Meanwhile Bulgaria has yet to confirm that Russian gas flows through its country have halted entirely.
The logistics of pipeline gas supply means that in practice, Russian gas may continue to flow to both countries even if Russia says it has switched off the taps.
Pressure in the pipe
In some sense, stopping gas exports really is as simply as turning off a tap. But there are major logistical and economics consequences to closing that valve.
For starters, Russia’s gas fields won’t stop pumping gas just because a pipeline is closed, because scaling down operations on a whim is too costly. That means if Russia cuts off a buyer, gas producers are suddenly burdened by an excess of energy that either needs to be quickly rerouted to other customers or pumped into storage.
But storage tanks fill up, and replacement customers are hard to come by. Russia can’t simply lay more pipe to redirect supplies. Eventually gas fields will start producing more than they can offload and then the only solution is to shut operations down—an expensive process that may end up damaging equipment—or wind down production.
“The gas supplies will decline gradually as pipeline running pressure drops, which is a technical process and it will take some time to fully halt the gas,” says Zongqiang Luo, natural gas analyst at Rystad Energy.
Simply “turning off the tap” could also squeeze deliveries farther downstream, because not every customer receives gas through a dedicated pipeline. Over half the gas piped into Bulgaria, for instance, is actually meant for other countries, says Yan Qin, a lead analyst at Refinitiv.
Russian gas piped to Serbia, Hungary, Greece, and other countries across Europe all transits through Bulgaria. So, in order for Russia to continue delivering energy to Greece, Gazprom may have to continue pumping gas through Bulgaria even though Moscow has technically “cut off” the country’s gas flow.
On Wednesday, Bulgaria threatened to review all its contracts with Gazprom—including those that allow gas to be transferred to countries like Hungary and Serbia.
However, in recent months, flows from Poland into Germany have dropped significantly. Germany can also get its gas direct from Russia through the Nord Stream pipeline, which bypasses Poland.
In fact, in recent months, gas in the Yamal-Europe pipeline, which connects Russia to Germany via Poland, has flowed from east to west more than west to east. Poland has been importing Russian gas via Germany, rather than the other way around. That may be one of the reasons Poland seems unconcerned by Russia’s threat of turning off the taps.
Siphoning off gas
If Russia is forced to continue pumping gas through a transit state like Bulgaria despite Moscow officially halting supplies to the country, it risks some of that throughput falling victim to an “unauthorized offtake.”
Throughout the 2000s, Russia routinely suspended gas exports to another major transit country for gas flowing into Europe—Ukraine—but continued selling gas to other European countries via the transit state. While Ukraine was officially banned from receiving Russian gas, European countries reported their gas deliveries dropped sometimes by as much as a third. Russia said Ukraine was to blame, accusing the transit state of siphoning gas meant for other countries.
On Tuesday, when Russia announced it was suspending sales to Bulgaria and Poland, Gazprom noted the risk that “unauthorized offtake of Russian gas from the volumes intended for transit into third countries” would lead to a reduction in overall shipments. Apparently, Gazprom knows it will have to keep pumping gas through pipes that run across the borders of its blacklisted customers, even if it says the taps are turned off.
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