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Economy

European Nations Accuse Russia of Natural Gas “Blackmail”

WARSAW, Poland — Polish and Bulgarian leaders accused Moscow of using natural gas to blackmail their countries after Russia’s state-controlled energy company said it would stop supplying the two European nations Wednesday.

The gas cutoff came after Russian President Vladimir Putin said last month that “unfriendly” countries would need to start paying for gas in rubles, Russia’s currency, which Bulgaria and Poland refused to do.

Russian energy giant Gazprom said in a statement that it hadn’t received any payments from Poland and Bulgaria since April 1 and was suspending their deliveries starting Wednesday.

If the countries siphon off gas intended for other European customers, deliveries to Europe will be reduced by that amount, the company said.

Polish Prime Minister Mateusz Morawiecki told Poland’s parliament that he thinks the suspension was revenge for new sanctions against Russia that Warsaw imposed over the war in Ukraine.

Morawiecki vowed that Poland would not be cowed by the cutoff. He said the country was safe from an energy crisis thanks to years of efforts to secure gas from other countries.

Lawmakers stood and applauded when he said that Russia’s “gas blackmail” would have no effect on Poland.

The new sanctions, announced Tuesday, targeted 50 Russian oligarchs and companies, including Gazprom. Hours later, Poland said it had received notice that Gazprom was cutting off its gas supplies for failing to adhere to the demand to pay in Russian rubles.

Poland’s gas company, PGNiG, said the gas supplies from the Yamal pipeline stopped early Wednesday, as Gazprom had warned they would.

Bulgaria said Tuesday that it also was informed by Gazprom that the country’s gas supplies would end at the same time.

Bulgarian Prime Minister Kiril Petkov called Gazprom’s suspension of gas deliveries to his country “a gross violation of their contract” and “blackmail.”

“We will not succumb to such a racket,” he added.

Russia’s move raised wider concerns that other countries could be targeted next as Western countries increase their support for Ukraine amid a war now in its third month.

European Union officials were holding emergency talks on Wednesday. European Commission President Ursula von der Leyen said the announcement by Gazprom “is yet another attempt by Russia to use gas as an instrument of blackmail.”

The Greek government was to hold its own emergency meeting in Athens. Greece’s next scheduled payment to Gazprom is due on May 25, and the government must decide whether it will comply with the demand to complete the transaction in rubles.

Greece is ramping up its liquefied natural gas storage capacity, and has contingency plans to switch several industry sectors from gas to diesel as an emergency energy source. It has also reversed a program to reduce domestic coal production over the next two years.

Europe is not without leverage in the dispute; at current prices, it pays Russia some $400 million a day for gas, money Putin would lose with a complete cutoff.

Russia can in theory sell its oil elsewhere, such as to India and China, because oil primarily moves by ship. But the gas pipeline network that carries gas from the huge deposits in northwestern Siberia’s Yamal Peninsula does not connect with pipelines that run to China. And Russia only has limited facilities to export super chilled liquefied gas by ship.

Russian gas made up some 45% of Poland’s overall gas usage until the cutoff. But Poland is far more reliant on coal to heat homes and fuel industry, with gas making up around 7% of the country’s overall energy mix.

Russian supplies to Poland already were expected to end later this year anyway. Poland has worked for many years to secure supplies from other countries.

Several years ago, the country opened its first terminal for liquefied natural gas, or LNG, in Swinoujscie, on the Baltic Sea coast. A pipeline from Norway is to due to start operating this year.

In Bulgaria, the main consumers of gas are district heating companies, and only about 120,000 households rely on gas.

Bulgaria’s energy minister said his country can meet the needs of users for at least one month.

“Alternative supplies are available, and Bulgaria hopes that alternative routes and supplies will also be secured at the EU level,” Energy Minister Alexander Nikolov said.

Fatih Birol, the head of the Paris-based International Energy Agency, described Russia’s move as a “weaponization of energy supplies.”

He said Russia’s decision “makes it clearer than ever that Europe needs to move quickly to reduce its reliance on Russian energy.”

 

 

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