Gazprom plans for lower 4Q Belarus transit to EU

Russian state-controlled Gazprom agreed last year with its subsidiary operator of Belarus' pipeline network — Gazprom Transgaz Belarus — to transit much less gas to the EU through Belarus along the Yamal-Europe pipeline in the fourth quarter of 2021 than in recent years. This suggests that the firm had hoped to ship gas through its under construction 55bn m³/yr Nord Stream 2 pipeline to Germany in the fourth quarter of 2021, although Gazprom could still lift its bookings through Belarus, Poland and Germany.

Gazprom published a list of transactions with related parties — including subsidiaries — ahead of its annual general meeting, indicating much lower bookings through Belarus for October-December than in previous years (see transit table). The listing was similar to that in previous documents setting out gas transit volumes, prices and planned sales to Belarus under a 2014-20 contract that was extended until the end of this year (see Belarus table).

The 2019 and 2020 booked volumes — which are split into supply transiting the Belarusian section of the Yamal-Europe pipeline to Kondratki, as well as Wysokoje and Tieterowka at the Polish border — are similar to what Gazprom actually shipped through Belarus (see graph).

But the parties may have already lifted subscriptions for the fourth quarter, or could do so if needed. The figures only include transactions made last year, meaning any bookings made this year would not be published until next year.

Only 107 GWh/d of Polish exit capacity was booked at Kondratki for October 2021-December 2022, down from 1.03 TWh/d in October 2020-September 2021, which was mostly in line with physical deliveries and technical capacity. No capacity towards Germany was booked at Mallnow from 1 October, down from subscriptions and technical capacity of about 931 GWh/d.

But auctions for annual capacity at these points are scheduled for 5 July, followed by quarterly auctions on 2 August.

Nord Stream 2 as alternative

Annual transit to Poland through Belarus has not dipped below 37.7bn m³ since at least 2015, excluding last year when Covid-19 cut into European demand for Russian gas. But combined bookings for 2021 of 29.6bn m³ are more than 8bn m³ lower than that. This deficit in bookings is more than the 6.88bn m³ that the initial string of Nord Stream 2 could potentially deliver in a three-month period, but less than the 13.8bn m³ possible with both strings running, assuming that Gazprom can fully utilise the capacity once construction is complete.

Pipe-laying was finished along one line last week.

Similar documents published in previous years suggest that the parties anticipated maximum annual transit of 50bn m³ and maximum supply to Belarus of 22bn m³.

But the launch of Nord Stream 2 could reduce Belarusian transit, especially with 40bn m³/yr already booked through Ukraine until the end of 2024. If Gazprom's access to Nord Stream 2 is linked by policy makers in Russia and the EU to continuation of shipments through Ukraine, the firm could have little need to maintain similar bookings through Belarus, especially given current disagreements by both sides with the country, and a potentially more urgent need to reach an agreement on the long-delayed Nord Stream 2 route.

Gas and transit prices have been a matter of contention between Russia and Belarus for decades, with disputes briefly interrupting transit to European countries in 2010 and 2004, although nothing on the scale of the disruption during the Russia-Ukraine "gas war" of 2009.

Russian president Vladimir Putin last week said that he was open to continuing Ukrainian transit after the expiry of the current deal at the end of 2024. "Everything is possible, we are ready for and want this, but goodwill is needed from our Ukrainian partners", he said.

By Paul Martin and Jacob Mandel

Russian transit via Belarus bn m³