Save for later Print Download Share LinkedIn Twitter Russia’s plan to stabilize Europe's volatile natural gas market remains vague one week after President Vladimir Putin asked the government and energy companies to present proposals. The ideas floated during a Putin-chaired online meeting on Oct. 6 do not appear to be a remedy for supply crisis, experts say. Europe, it appears, will have to wait until Gazprom completes injections into domestic storage and the Nord Stream 2 pipeline receives operational approval. Some perceived Putin’s pledge to help as a move to calm critics and show that Russia is not indifferent to Europe's energy plight. At the very least, his words cooled spot prices from almost $2,000 per thousand cubic meters on Oct. 6 to around $1,000/Mcm this week. Still, neither Russian officials nor industry insiders can say what exactly Russia will do to resolve the situation and, if it can, why something wasn’t done earlier.Speaking at the Russian Energy Week in Moscow on Oct. 13, Putin insisted that Russia supplies as much gas as European buyers ask for. Russia has increased gas exports by 10% — or by 15% if LNG is included — so far this year and will exceed the Ukrainian transit contract by 10% in 2021, he said. To be sure, exports are still lower than in pre-crisis 2019, let alone the maximal contractual amounts in Europe, which Gazprom in 2018 estimated at around 205 billion cubic meters. Gazprom expects to export a total 183 Bcm to Europe this year. Gas flows from Russia remained limited this week, suggesting that Moscow is still unable or unwilling to immediately boost supplies. The pressure on Russia persists, although Gazprom has fulfilled its contractual obligations and actually increased them, save for the past two months, compared to last year’s levels. Russia insists that such crises could be avoided if Europe would sign more long-term deals with Gazprom and give up the policy of diversifying away from Russian gas. “Change adversary to partner and things get resolved easier … When the EU finds enough political will to do this, they will know where to find us,” Vladimir Chizhov, Russia’s permanent representative to the EU, was quoted by the Financial Times as saying.Vague PlanRussia’s plan now looks limited to a) piping gas via Ukraine in line with the 40 billion cubic meter per year transit contract, but not beyond, and b) selling extra gas via Gazprom’s Electronic Sales Platform (ESP) in St. Petersburg, if feasible. Importantly, Rosneft CEO Igor Sechin once again suggested at the meeting his company could help if approved to export 10 Bcm/yr via Gazprom’s pipelines, but it will only have this gas available next year at the earliest. The start of Nord Stream 2 pipeline operations, now pending approval from a German regulator, will reduce tensions and cool down the prices, Putin said. Many see Gazprom’s tactic to restrict supplies as an attempt to force an expedited approval. But the question is whether Gazprom will pump any spare gas — when and if it materializes — into Nord Stream 2 or redirect flows from the Ukrainian transit and Yamal-Europe pipeline.“We favor energy security of Europe. We want to work collaboratively,” Russian Deputy Foreign Minister Sergei Ryabkov told BBC on Oct. 12, adding that Gazprom has already started “pumping out from its reserves into the pipelines to stabilize the market.” Storage data shows that Gazprom withdrew a modest 4.1 million cubic meters on Oct. 7 and 460,000 cubic meters on Oct. 12 from its Haidach storage in Austria and 11.9 MMcm on Oct. 7-8 and 1.4 MMcm on Oct. 11-12 from Jemgum storage in Germany. Gazprom withdrew gas from its depleted European storage in the summer to offset lower pipeline flows, which however only meant that it needed to inject even more ahead of winter.Low Flows Speaking at the St. Petersburg International Gas Forum on Oct. 7, Gazprom Export CEO Elena Burmistrova said Gazprom was ready to help but through long-term contracts. “We will look for acceptable models that would work in favor of both suppliers and buyers,” she said.Otherwise, Gazprom is in no hurry to increase supplies, most likely because it has prioritized domestic sales and injections into Russian storage. Deputy Prime Minister Alexander Novak said injections should be complete by around Oct. 20, which might leave more spare gas for exports. And based on September output, Gazprom might also have another 140 million cubic meters per year in spare production capacity.Gazprom hasn’t so far resumed day-ahead spot sales at ESP, and flows via Ukraine and the Yamal-Europe pipeline across Poland remain far below booked capacity. Gazprom was flowing below 90 million cubic meters per day via Ukraine and slightly above 20 MMcm/d via Yamal-Europe this week, leaving around 30 MMcm/d in idle capacity in the two routes combined, according to gas transmission data. The gas giant insists that it covers all the daily nominations from the buyers despite the lower flows. “When it is technically possible, we satisfy the nominations that exceed our contractual obligations,” Burmistrova said.