On Wednesday, Russian Deputy Prime Minister Alexander Novak said that the permission for the Nord Stream 2 undersea gas pipeline from Germany’s regulator could calm soaring European gas prices.
“I think there are two factors, which could somewhat cool off the current situation. First of all, of course, this is, definitely, completion of certification and the fastest clearance for gas supplies via the completed Nord Stream 2,” Novak said.
The project has been facing opposition from the US and some European countries in fear that it would increase Europe’s reliance on the Russian energy supply.
He added that the gas sales rise from Russia’s major energy firm Gazprom’s Electronic Sales Platform could also factor in colling off the surge in prices. However, the company has suspended gas sales for delivery in 2022 since late August even when President Vladimir Putin has said that agreed with the proposed increase as he thinks that Russia should meet its domestic gas needs first.
Another factor, Novak opined, is some speculative trade that did not reflect the fundamentals of supply and demand.
Putin also voiced his opinion on some reasons behind the gas crisis, which are the economic recovery that drove gas demand higher and the cold weather in Europe.
The president denied the allegation by the International Energy Agency (IEA) and some in the European Parliament that Kremlin has a role in causing the skyrocketing gas prices in Europe.
Instead, he underlined that Russia has been a reliable energy supplier to Europe, which may see record-high Russian gas exports in 2021 as Moscow is raising gas output, in response to the energy crunch and stands ready to stabilize the market.
On Wednesday, Putin’s spokesman Dmitry Peskov said that Russia is ready to discuss new long-term contracts for gas sales to European consumers and that Gazprom was meeting all its obligations.
Previously, Putin has stated that Europe was in the wrong to cut the share of long-term deals in natural gas trade in favor of the spot market instead, where prices have surged.
He commented, “It was aimed at transition to spot gas trade. And as it turned out, it has become obvious today, that this practice is a mistake.”
Gazprom has so far resisted moving to spot trade in Europe, preferring long-term deals, which sometimes last around 25 years.
