President Putin declares Russia helps Europe solve energy crisis
On October 6, at an online meeting on energy development issues, Russian President Vladimir Putin announced that his country will help Europe solve the energy crisis, but not at the expense of itself.
Speaking at the meeting, Russian President V. Putin noted that the world economy is now successfully recovering from last year's crisis. Energy demand is growing and prices are rising.
The Russian leader pointed to four main factors that led to the gas price boom, which reached $2,000 per 1,000 cubic meters in Europe on a daily basis. According to him, first, the rapid economic recovery after the crisis has “heated up” the demand for energy.
Second, in early 2021, a cold winter in many European countries caused a serious decline in natural gas reserves in underground storage facilities.
Third, in the summer, due to hot and windless weather, wind power production has decreased significantly. President Putin noted that over the past 10 years in Europe, the energy balance has changed significantly. Many countries in the region have abandoned coal and nuclear power plants and switched to weather-dependent wind power.
And fourthly, Europe is cutting the so-called long-term contracts, in order to switch to gas barter transactions. The Russian leader called this a mistake, as it does not take into account the specifics of the gas market due to a large number of uncertain factors.
 |
Russian Deputy Prime Minister Alexander Novak added that the reasons were poor supply-demand forecasts and speculative factors that require a separate investigation. At the same time, US liquefied natural gas also played a role due to increased demand in the summer, which was supplied to Latin America, not to Europe. Novak said that it was necessary to stabilize the situation as soon as possible, because high prices began to close many consumer businesses and "there was a more powerful transition to renewable energy sources."
According to him, Moscow is fully fulfilling its contractual obligations and may this year break the record for the volume of supplies to Europe - over the past nine months they have exceeded last year's similar indicator by 15%.
Deputy Prime Minister Novak outlined two options to help overcome the energy crisis in Europe: launching Nord Stream 2 as soon as possible (but the timing of its certification depends on Europe) and increasing trading volumes on Gazprom’s electronic trading platform in St. Petersburg. He said Russia would need another 1-2 weeks to refill its storage tanks.
President Putin noted that the current situation on the European market is not beneficial for Russia and supports the idea of increasing gas supplies on the market, but not to the detriment of the country itself.
The head of Rosneft - Igor Sechin proposed another option. According to him, the situation can be stabilized by allowing the export of 10 billion cubic meters of gas from the oil company's resources. He emphasized that this also fits into the concept of "generating additional income".
In a related development, the issue of gas transit through Ukraine was discussed separately at the meeting. President Putin dismissed speculation on this topic - Russia's obligation to deliver 40 billion cubic meters through Ukrainian pipelines this year will even be exceeded.
 |
| Nord Stream 2, which will supply energy to Europe, is said to be more than 95% complete. |
However, the Russian leader warned that it is impossible to increase it further, because on the one hand, it is unsafe - it is impossible to increase the pressure in Ukrainian pipelines that have not been repaired for decades. On the other hand, this is also not beneficial, because pumping through new pipelines significantly reduces carbon dioxide emissions and costs Gazprom almost $3 billion less.
The Russian leader called on the company to fully comply with its transportation obligations. According to him, no one should be put in a difficult position, including Ukraine, despite the current state of Russian-Ukrainian relations, and “there is no need to undermine Gazprom's reputation as a reliable partner, absolutely reliable in all respects."
President V. Putin noted that Russia has always been a reliable gas supplier to consumers around the world - in general, to both Asia and Europe, and that the country has always fulfilled all its obligations./.
