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Eni Seeks to Restore Stalled Russian Gas Flows

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Italy is the latest European country to experience an interruption of gas imports from Russia.

Eni said on Monday that it was talking to Gazprom and Austria's gas transmission system operator to find a way to resume flows of Russian gas to Italy after the Russian gas giant halted them on Saturday.

Gazprom stopped supplying the Italian energy company on grounds that recent regulatory changes in Austria made it impossible for those supplies to continue.

The Russian gas that Eni imports into Italy must first transit through Austria.

Reuters quoted Eni CEO Claudio Descalzi on Monday as saying that the problem was triggered by Austria's requirement for Gazprom to provide a financial guarantee for transit fees, but that he expected a solution by the end of this week.

Ukraine Transit Flows Steady

Although Gazprom has stopped sending some 20 million cubic meters of gas per day to Eni, it has not reduced exports of Russian gas via Ukraine, from where the gas flows to Slovakia before reaching Austria and Italy.

Ukraine transited 41.6 MMcm of Russian gas on Saturday, which was in line with levels seen since late May. Nominations for Sunday and Monday indicated similar levels.

However, more gas was injected into storage in Austria — about 12 MMcm/d more on Saturday than on Friday, according to data from Gas Infrastructure Europe (GIE).

Austrian authorities said supplies to the country were secure, but that the situation was tense, and that a turn for the worse could not be ruled out.

Uncertainty About Supply

Supplies of Russian gas to Europe have fallen sharply in recent months against the backdrop of a deterioration in relations over Russia's war in Ukraine, EU sanctions against Russia and Western military support for Ukraine.

Earlier this year, Moscow cut off supplies to six European countries that refused to comply with new Russian rules for payments from "unfriendly" countries.

It also stopped supplies to Germany via the Nord Stream pipeline, maintaining that EU sanctions had prevented crucial maintenance and repairs — an argument that was dismissed by Germany and others as a mere pretext for cutting off the flow of gas.

More recently, the Nord Stream and Nord Stream 2 pipelines were damaged in apparent sabotage attacks.

Construction of the Nord Stream 2 line was completed, but Germany blocked it from starting operations because of the Ukraine crisis.

The Yamal-Europe pipeline has not shipped any gas to Europe since mid-May and concerns have also arisen about a possible interruption of Russian gas flows into Europe via the Turk Stream pipeline and the Ukrainian transit route.

Meanwhile, Hungary said on Monday that it has reached an agreement with Gazprom allowing it to defer payment for winter gas supplies. Hungary is an outlier within the EU, having maintained fairly cordial relations with Moscow.

Gazprom said on Monday that one of the two parallel Nord Stream 2 "strings" was not damaged by the recent attacks and could potentially be used to transport gas after checks and testing. It's unclear, however, if Germany would agree to such a scenario.

Sharp Drop in Gazprom Exports

With the original Nord Stream pipeline idle since late August, Gazprom’s exports to Europe (including Turkey) and China fell to just 4.7 billion cubic meters (around 160 MMcm/d in September), Energy Intelligence calculates based on Gazprom data.

That represents a sharp drop of 68% compared with September of last year and a decline of 32% versus August.

Exports to China grew strongly, in line with a planned ramp-up, Gazprom said without providing figures. That implies an even sharper drop in exports to Europe than the decline in the aggregate numbers for Europe plus China.

Lower exports were the main factor behind a 38% year-on-year decline in Gazprom's September production to 25.2 Bcm.

Russia's overall natural gas production in September — including output from other producers — fell 24% versus August to 46.1 Bcm, according to sources.

Gazprom is the only Russian gas producer that is allowed to export gas to other countries via pipelines.

For more coverage of the Ukraine crisis, visit Ukraine Crisis: Energy Impact >

Russian Gas Production
(MMcm)Sep '22Aug '22YTDSep '21
Gazprom 25,200.025,700.0313,300.040,900.0
Novatek6,266.25,970.859,551.55,949.8
Rosneft5,148.34,464.436,443.53,989.4
Gazprom Neft2,639.02,643.824,916.91,521.6
Lukoil 1,464.61,497.113,781.72,306.5
Other Producers 3,853.03,795.735,831.33,877.0
PSA Operators 1,545.61,620.618,993.02,502.7
Russia Total 46,116.845,692.4502,817.861,047.1

Topics:
Gas Supply, Sanctions, Ukraine Crisis
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