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Soaring natural gas prices in Europe fell on Thursday after Russia said that in addition to existing long-term contracts, it could also sell more natural gas to European spot buyers through the domestic market.
The Kremlin said on Thursday that Russia may increase its supply of natural gas to Europe, where soaring natural gas prices are putting pressure on consumers.
Kremlin spokesman Dmitry Peskov said that the existing natural gas transportation routes allow for increased supply before the new Beixi 2 pipeline, which is designed to transport Russian natural gas to Germany, starts operation.
“There is potential,” Peskov said in a conference call with reporters. “It all depends on demand, contractual obligations and commercial agreements.”
Soaring natural gas prices in Europe fell on Thursday. The day before, Russian President Vladimir Putin suggested that in addition to existing long-term contracts, Russia could also sell more natural gas to European spot buyers through the domestic market.
Russian Deputy Prime Minister Alexander Novak said on Wednesday that the launch of Nord Stream 2 will quickly stabilize the European energy market. Some people in Europe believe that this statement is to prompt regulators to certify new pipelines more quickly.
When asked about Novak’s comments, Peskov replied that Russia could increase the supply of existing routes.
Putin said in a speech at a government meeting on energy issues on Wednesday that as the global economy recovers from the pandemic, demand has grown rapidly, which has boosted the price of natural gas in Europe. He said that cold winters and reduced power generation from alternative energy sources are also factors.
But the Russian leader said the EU’s efforts to shift from long-term supply contracts to natural gas spot trading played a key role.
“I want to emphasize that the situation in the European energy market is a stark example of no hasty and politically motivated actions allowed in any field, especially in energy that determines industrial stability and the well-being and quality of life of millions of people. On the issue,” Putin said.
He strongly rejected criticism from some European politicians, who claimed that Russia’s failure to increase supply is pushing prices up.
“Russia has always been a reliable natural gas supplier for consumers around the world, Europe and Asia, and has always fully fulfilled all its obligations. I want to emphasize this point,” Putin said.
Putin emphasized that Russia’s natural gas supply to Europe in the first nine months of this year has increased by 15% over the same period in 2020, and added that they may set a new record this year.
The Russian leader also refuted Ukraine’s claim that Moscow is trying to reduce supplies through Ukrainian territory in anticipation of the Beixi 2 being put into use. Putin said Russia is sending 8% more natural gas through Ukraine than envisaged in existing transit contracts.
He said that Russia can sell more natural gas to European spot buyers through its domestic exchanges, and pointed out that violent price fluctuations are also not good for Moscow.
But he added that Russia’s state-controlled natural gas giant Gazprom also needs to fill its own stores to meet domestic demand in the winter.
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