FT: The European Union is discussing two options for limiting Russian gas prices

Oleksiy Yarmolenko

The European Union is developing a mechanism for limiting the price of Russian gas. So far, the European Commission is considering two options for introducing such a restriction.

The Financial Times writes about this with reference to its own sources.

The first option provides for the introduction of a price limit for Russian gas for all EU member states. In addition, a separate company will be created in the European Union, which will deal with procurement for all countries. But there they assess the risks of such an idea, since the Russian “Gazprom” may consider it a force majeure and terminate existing gas supply contracts.

The second option provides for the division of the EU into "red" and "green" zones, depending on the extent to which countries are at risk of gas supply interruptions. In the "red" zones, countries will have the right to buy Russian gas at any price, and in the "green" zones — only at a limited price. According to the EU, this will prevent possible problems with supplies, because in case of an emergency, gas can be supplied to the "green" zones from the "red" zones.

  • On September 2, Russiaʼs “Gazprom” reported on a complete shutdown of gas supplies through the “Nord Stream” pipeline. This was explained by a malfunction in the single "Portova" compressor station, where "an oil leak with an admixture of sealing compound was detected through the connectors of the terminal connections of the cable lines of the low and intermediate pressure rotor speed sensors." The Kremlin said it would resume supplies if the West lifted sanctions related to the operation of gas pipelines.
  • On August 19, “Gazprom” stopped pumping gas to the EU through “Nord Stream” until August 31, referring to the repair of the only working turbine. This caused a significant increase in gas prices in the EU. This gas pipeline is the main one for deliveries to the EU.
  • On August 30, “Gazprom” stopped supplying gas to Franceʼs largest customer, Engie, allegedly due to "non-payment". Earlier, Engie reported that “Gazprom” had further cut gas supplies due to a contract dispute. The French energy minister then said that the country should prepare for a complete shutdown of supplies, as Russia uses gas as a weapon and leverage.