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Europe’s Gas Prices Jump To Record As Key Pipeline From Russia Halts Flows


European gas prices jumped to an all-time high on Tuesday after natural gas on a key pipeline from Russia to Germany reversed flow eastward and freezing temperatures took hold in many parts of Europe.

The benchmark price for Europe at the Dutch Title Transfer Facility (TTF) surged by 11 percent early on Tuesday to a record 162.78 euros per megawatt-hour.

According to data from German operator Gascade, cited by Reuters, flows of natural gas from Russia on the Yamal-Europe pipeline via Belarus to Poland and Germany have been falling since the start of the weekend, stopped completely on Tuesday, and then reversed direction from Germany east to Poland.

Gas prices in the UK also surged to a new all-time high after hitting the previous record just a few days ago last week. UK gas prices soared to an all-time high of 350 pence per therm last Thursday, which was a massive 520 percent jump year to date. Today, the UK benchmark price hit 400p per therm—a new record.

Freezing temperatures across Europe, low Russian gas supply, and low wind power generation in Germany have all combined to send European and UK gas prices to new records today.

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“EU gas and power open higher again today with gas flows from Russia on the Yamal-Europe pipeline dropping to near zero. Just as German wind output falls to a five-week low and freezing temperatures spread across Europe,” Ole Hansen, Head of Commodity Strategy at Saxo Bank, noted.

At the start of this week, natural gas exports from Russia via the Yamal-Europe pipeline remain limited as true winter begins, Russia keeps more gas for domestic consumption, and Gazprom has not booked too much additional day-ahead capacity at auctions.

Traders are watching closely every tender in which Gazprom is set to book pipeline capacity via the main pipeline routes to Germany and Poland. Every time Russia doesn’t book too much additional capacity, Europe’s benchmark gas prices jump.

Some analysts and EU officials have said that Russia is deliberately keeping extra gas supply – the one on top of its contractual obligations – low amid the row over Ukraine and the delays in the certification of the Nord Stream 2 gas pipeline.

Russia denies there is a connection between its limited extra gas supply to Europe and the current events with Ukraine and Nord Stream 2.

“This is a purely commercial situation. You have to ask Gazprom about the details,” Kremlin spokesman Dmitry Peskov said on Tuesday, commenting on the halted gas flows to Germany via the Yamal-Europe pipeline. 

By Tsvetana Paraskova for

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