Why Belarus’s pipeline threats could mean even higher gas prices | Gas

What is the Yamal-Europe gas pipeline?

The Yamal-Europe gas pipeline is owned by Russia’s state gas giant Gazprom and measures more than 2,600 miles. It brings Russian gas from the country’s giant gas fields on the Yamal Peninsula and western Siberia to Poland and Germany via Belarus. The pipeline does not directly lead to other European countries – but it helps to feed Germany’s giant gas storage facilities which are used by energy companies and traders across the continent.

Why is this pipeline important?

Russia remains Europe’s biggest supplier of gas and around a fifth of these supplies travelled through Belarus last year, mainly through the Yamal pipeline, making it an important conduit for European gas imports and for Russia’s gas revenues. The threat by Belarusian leader Alexander Lukashenko to cut deliveries of gas to Europe via the Yamal-Europe in retaliation against any new EU sanctions would be a major concern for European energy companies on top of the looming winter gas crisis.

What would happen if Belarus cut off gas supplies?

Gas market prices across Europe are already at near-record highs due to a global surge in demand for fossil fuels following the Covid-19 economic slowdown last year. So any disruption to supplies could force market prices even higher, raising concerns for household energy bills and fresh fears that factories would need to shut down to avoid financially crippling gas prices.

How has Russia reacted?

Russia is no stranger to using gas flows as a political weapon or disputes over pipeline routes, following the 2009 Russia-Ukraine gas crisis. At the time Russia cut off supplies to Ukraine following the collapse of supply contract negotiations, and Ukraine retaliated by withholding Russian gas destined for other European countries. But on the Belarus threat the Kremlin has remained silent. Although a disruption to its exports to Europe would be far from ideal, Russia’s biggest customer is Asia, where demand for gas is high. A pipeline crisis would also help its lobbying of the EU to approve its controversial Nord Stream 2 pipeline project running directly to Germany, which circumvents transit countries.

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