After Russian supply stop announcement: Gas flows via Yamal pipeline to Poland unclear

Shortly after Moscow announced that it would turn off the gas tap to Poland in the wake of the ruble dispute, there is uncertainty about the gas flows actually entering the country. According to media reports, deliveries were at zero early Wednesday morning, but later it was said that it was only an interruption. Polish gas company PGNiG had received a letter from Gazprom on April 26, 2022, announcing the complete suspension of deliveries under the Yamal contract. The Polish side stressed that currently, however, all customers could be supplied as requested. The national transmission system is "continuously supplied via other feeds into the gas network," and gas storage facilities are being tapped, it said.

The Polish PGNiG assured that the diversification of gas supply sources had progressed to such an extent that gas could be obtained via interconnections on the western and southern borders and the LNG terminal in Swinoujscie, for example, or could be covered by domestic gas production. Currently, storage facilities in Poland are 80 percent full, he said. Germany has also seen no gas arriving via the Yamal pipeline through Poland since as early as April 7, according to a gas situation report from the Federal Network Agency. Nordstream 1 and Waidhaus (Austria), however, are constantly filled.

According to media reports, Bulgaria, which has been heavily dependent on Russian gas up to now, will also no longer receive any deliveries, according to Gazprom. The country has been working on a pipeline connection to Greece for some time.

The background to the Russian supply freeze is Moscow's demand that natural gas deliveries to Europe be paid for in rubles instead of in euros or dollars, as is usually the case. Actually, the arrangement has been in effect since April 1, but now, at the end of the month, the first bill is due. According to media reports, Bulgaria had not paid according to the new way demanded by Moscow, which provides for a construct in which payments could formally continue to be made in euros or dollars via two separate accounts and an exchange mechanism. Poland had also repeatedly rejected paying for Gazprom gas in rubles and insisted to Russia that the contracts be honored.

More on further developments and in particular on the possible impact of Russian supply practices on Germany will follow shortly.

On the price effects of the announced supply freezes on the energy markets, see: EID Energy Price Briefing, April 27, 2022.