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Russia puts sanctions on Gazprom units in Europe and U.S., part owner of pipeline -Breaking

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© Reuters. FILE PHOTO A view of valves at the Bovanenkovo gasfield on Russia’s Arctic Yamal peninsula. Picture taken May 21, 2019. REUTERS/Maxim Shemetov

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LONDON, Reuters -Russia has imposed sanctions against the Polish owner of Yamal’s pipeline carrying Russian gas to Europe. Also the ex-German unit of Gazprom (MCX) which supplies gas to Europe through its subsidiaries.

The entities on a list of affected firms on a Russian government website http://publication.pravo.gov.ru/SignatoryAuthority/government on Wednesday were largely based in countries that have imposed sanctions on Russia in response to its invasion of Ukraine, most of them members of the European Union.

It was not clear what this would mean for Europe’s gas supply. Europe buys over a third of its natural gas from Russia. According to data provided by the Gascade pipeline operator, eastbound gas flows from Germany continued via Yamal-Europe from Germany into Poland.

The European Union is considering a possible embargo of Russian crude. Trading firms will reduce activity with Russia once tighter EU rules regarding Russian oil sales are in effect. Energy prices rose Wednesday.

Russian President Vladimir Putin declared on May 3, that no Russian entity will be permitted to enter into any deals with anyone on the sanction list or fulfill its obligations under existing agreements.

This decree specifically prohibits any export of goods and raw materials to persons or entities listed on it.

Russia’s Interfax news agency reported that the group included EuRoPol Gaz the Polish owner and Gazprom Germanyia subsidiaries located in France, Britain, France and the Benelux area.

Gazprom delivers large quantities of its gas via the Yamal Europe Pipeline to Europe. These activities are vital for Europe’s gas market as well its supply to households and industry.

Germania Operations, which are based on Russian Gas Production, covers the whole gas value chain, from pipeline transmission and storage to supplies to wholesalers or retailers.

Gazprom gave up its ownership of the firm without explaining, forcing Germany’s energy regulator into taking control.

These include Germany’s largest storage unit for gas, Rehden (Lower Saxony), which has a capacity of 4 billion cubic metres.

German economy minister said it was still reviewing the Russian Gazprom Germania announcement but had not provided any further details. According to the ministry, gas supply is guaranteed at present and it is constantly being checked.

According to a spokesperson, “The German government, Federal Network Agency and Gazprom Germania trustees are currently in the process” of preparing for possible scenarios.

Putin’s decree was a reaction to illegal US actions and allies. It was meant to either deprive the Russian Federation, Russian citizens and Russian legal entities their property rights or restrict them.

Russia has been hit with the harshest sanctions by America and its allies. These are steps Putin regards as an act of economic warfare.

Ramanan Krishnamoorti (chief energy officer, University of Houston) stated that the intent was clear. They are just retaliating to the Western European actions and get control over the gas flow and revenue.

Putin (69) repeatedly warned Moscow that Moscow would not respond. However, the Kremlin had until last week been unable to stop gas supply to Poland or Bulgaria, and demanded a new payment system for European gas buyers.

Gaz-System was not available for comment immediately.

EuRoPol Gaz jointly owns Gazprom as well as Poland’s most powerful gas company, PGNiG. The gas carrier earns transit charges for Russian gas entering Poland. PGNiG had no immediate comment.

Wingas is a Gazprom Germania subsidiary, and was one of Germany’s largest gas traders. It stated that after being taken over by German regulators it would operate under new parameters.

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