Exclusive: Russia’s Gazprom announces force majeure on some gas supplies to Europe

A view shows a screen bearing the Gazprom logo at the Saint Petersburg International Economic Forum (SPIEF) in Saint Petersburg, Russia, June 17, 2022. REUTERS/Anton Vaganov/

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LONDON, July 18 (Reuters) – Russia’s Gazprom (GAZP.MM) He declared force majeure on gas supplies to Europe for at least one major customer, according to a letter from Gazprom that will heighten Europe’s fears of fuel shortages.

The legal force of the letter, dated July 14 and seen by Reuters on Monday, was to protect Gazprom from compensation payments for crippled supplies, but it risks escalating tensions between Russia and the West over the invasion of Ukraine, which Moscow describes as a “special military operation”. .

The letter said Gazprom, which has a monopoly on Russian gas exports via pipelines, could not meet its supply obligations due to “extraordinary” conditions.

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It said the force majeure clause, which was invoked to lift a company from contractual obligations due to factors beyond its control, was in effect retroactively from deliveries beginning on June 14.

A trade source, who asked not to be identified due to the sensitivity of the issue, said the letter concerned supplies via the Nord Stream 1 pipeline, a major supply route to Germany and beyond.

There was no immediate comment from Gazprom.

The Nord Stream 1 pipeline has been closed for annual maintenance, which is supposed to be completed on July 21, but some European Gazprom customers are concerned that supplies will not resume. Read more

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One of them, the Austrian oil and gas group OMV (OMVV.VI)On Monday, it said it expected to resume gas deliveries from Russia via the Nord Stream 1 pipeline as planned. Read more

turbine delay

Even before Nord Stream began maintenance on July 11, Gazprom on June 14 reduced shipments through the pipeline under the Baltic Sea to Germany, citing delays to a turbine being maintained in Canada by equipment supplier Siemens Energy. (ENR1n.DE).

Gazprom’s force majeure announcement is effective from June 14, exempting it from any shortfall since then.

The European Union, which has imposed sanctions on Moscow, aims to halt the use of Russian fossil fuels by 2027 but wants supplies to continue for now while developing alternative sources.

Russian gas supplies have fallen through major routes, including through Ukraine and Belarus and via Nord Stream 1 under the Baltic Sea.

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(Reporting by Julia Payne) Editing by David Goodman, Edmund Blair and Barbara Lewis

Our criteria: Thomson Reuters Trust Principles.

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