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Russia's Novak says 'no one' has asked government for additional gas supply

Highlights

Gazprom ready to supply more gas if requested

Russia to take care of domestic market 'first and foremost'

Nord Stream 2 technically ready to start in coming days

Russia's Deputy Prime Minister Alexander Novak said Oct. 14 that there had been no official requests put to the Russian government from Europe for additional gas supply.

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Speaking at Russian Energy Week, Novak also said the Nord Stream 2 pipeline would be ready to begin commercial operations "in the coming days" but that its startup still depended on winning approval from European regulators.

European gas prices have soared in recent weeks on intensifying winter supply concerns, with the day-ahead TTF price hitting a record high of Eur116.10/MWh ($39.50/MMBtu) on Oct. 5, according to S&P Global Platts assessments.

Novak said Russia and state-controlled Gazprom stood ready to supply more gas if it is requested, echoing comments made Oct. 13 by Russian President Vladimir Putin.

"Officially, no one has asked either the energy ministry or the government for additional [gas] supplies," Novak said.

"Gazprom, as the only exporter of pipeline gas, to date is fully meeting its obligations under all contracts. If there is a need from buyers with long-term contracts to increase gas volumes [...] then Gazprom would increase supply in accordance with requests," he said.

"If somebody needs more gas, Gazprom would be ready to consider [providing] those supplies based on the output capacities that it has," he said.

Novak said he had met with the management of Finland's Fortum -- the majority owner of German utility Uniper -- on Oct. 13, and that the company had said it was not experiencing any supply issues.

Nord Stream 2

Russia has also repeatedly said that the launch of the Nord Stream 2 pipeline to Germany would help calm the European gas market.

Asked when he expected the pipeline to begin commercial operations, Novak said it would depend on the approval process from the regulator. "The construction of Nord Stream 2 is completed, and now works on commissioning and filling of the pipe with the required technical gas are underway," Novak said.

"It will be ready in the coming days in order to become operational," he said, adding that the operator Nord Stream 2 AG had done all the necessary work to begin commercial operations, including the technical certification of the first 27.5 Bcm/year string.

Nord Stream 2 AG said on Oct. 4 it had begun filling the first string with gas following the pre-commissioning process.

Novak said first flows would depend on the timing of the approval from the German regulator, the Bundesnetzagentur.

Nord Stream 2 AG filed its application for approval as an independent gas transmission system operator in June, but it was only deemed complete in September.

The Bundesnetzagentur has up to four months from Sept. 8 to produce a draft decision, which means a first decision might not be published before January 2022.

Unless the regulator gives the green light to begin flows as part of its draft decision, the process could delay first gas even further as the European Commission then has two months to review it before returning it to the regulator, which then itself has two more months to make a final decision.

"It all depends on the German regulator," Novak said. "This does not depend on us, but solely on the European and German regulators and when they give approval," he said.

"Commercial deliveries can start from the moment of the approval of the German and European regulators and the issuance of requests from buyers of gas," he said.

European issue

Novak went on to criticize Europe for "poor management" of its gas market and the EU's "targeted" strategic shift away from long-term contracts to more spot supplies.

"In Europe, poor decisions were made. Nobody is planning gas demand, nobody is thinking what is going to happen with supply. So there is just a hope that some invisible power is going to take care of gas supplies," he said.

"You can't blame other markets for that," he said.

Novak also said Russia would make sure its domestic market was well supplied this winter. "First and foremost we are going to take care of the domestic market and fill our own storages," he said.

He said the storage injection season was ongoing in Russia, with current temperatures allowing for continued stockpiling, adding that he expected injections to carry on until the end of October.

"You have to bear in mind the need to have back-up gas reserves to get through winter and those reserves have to be formed to take into account the lowest possible temperatures," he said.