The G7 and the European Union will block the restart of Russian gas pipelines

The G7 and the European Union will impose restrictions on Russian gas imports along routes where Moscow has cut supplies, according to officials involved in the talks, the first time pipeline gas trade has been blocked by Western powers since the invasion of Ukraine.

The decision, to be finalized by G7 leaders at a summit in Hiroshima next week, would block the resumption of Russian pipeline gas exports on routes to countries such as Poland and Germany, where Moscow blocked supplies last year and Energy crisis had started. across Europe.

Western powers want to make sure Russia doesn’t get a boost in its energy revenues as they attempt to ramp up economic pressure 15 months after Moscow’s full-scale invasion of Ukraine.

One of the executives, all of whom spoke on condition of anonymity, said the move was “to ensure that the partners do not change their minds in a hypothetical future”.

A draft statement from the G7, seen by the Financial Times, said the grouping of major economies would further reduce their use of Russian energy sources “including preventing the reopening of avenues previously closed by Russia’s weaponisation of energy”. is” at least until “there is a resolution” to the conflict”.

A European official outside the G7 said he suspected the move was partly aimed at giving investors the confidence to back LNG infrastructure projects in both Europe and North America, allaying concerns that cheaper There could be a quick return of Russian gas.

While the measures are unlikely to affect any immediate gas flows, it underscores a deep determination in Brussels to make permanent the rapid and painful pivot away from decades of dependence on Russian energy.

The ban is highly symbolic as at the start of the war the EU refrained from targeting pipeline flows given Moscow’s heavy reliance on gas. Russia went ahead and cut supply anyway, causing gas prices to rise to more than 10 times their normal levels.

But prices have fallen substantially in recent months as Europe successfully cut winter demand, accelerated the roll-out of renewable energy and sourced alternative supplies such as seaborne shipments of LNG.

Moscow’s share of European gas imports has fallen from more than 40 percent to less than 10 percent, and a mild winter has boosted gas storage in the EU.

Officials are confident that gas storage, which is already about 60 percent full, compared with about 30 percent in 2022, will reach capacity before next winter arrives.

“With European gas storage unusually high for the time of year and wholesale prices back in what could be considered their normal price-range, you can understand why Europe’s leaders are confident that this plan will be implemented soon.” itself will not undermine security of supply,” said Tom Marzek-Manser at energy consultancy ICIS.

“Nevertheless it is important not to become overly complacent about the outlook for the European gas market.”

Oil pipelines Russia has cut off, including the northern leg of the Druzhba line supplying refineries in Germany and Poland, could also be blocked under EU measures to prevent flows from resuming .

The embargo is being discussed by diplomats as part of the EU’s 11th sanctions package. The commission said it would not comment on the discussion of the sanctions or on the leaks.

An EU diplomat said the proposal needed more clarification from Brussels to show how the “status quo” would change, especially as some oil from Kazakhstan flows through Druzhba. “It should be very clear how this will work,” he said.

Berlin and Warsaw, despite being exempt from sanctions on Russian oil, said they would voluntarily end crude deliveries through Druzhba last year, although Poland continued to receive supplies until Russia cut the flow in February. did not cut. German refineries stopped ordering Russian crude earlier this year.

Some of Russia’s main gas carriers to Europe – the Nord Stream 1 and 2 pipelines – were broken up last year and only one of their four wires remains. But other pipelines such as the Yamal line to Poland remain intact.