ANALYSIS | Europe is running out of time to find alternatives to Russian gas

Ukraine cuts Russian gas flow to Europe 1:12

(CNN) --

The security of Europe's energy supplies looks increasingly shaky.

Just 24 hours after Ukraine curtailed the flow of natural gas through its territory to Europe, blaming interference by Russian troops, Gazprom cut off supply through the Yamal-Europe gas pipeline that runs through Poland, and stopped sending gas to a distributor in Germany.

Although the affected volumes are small, since in total they represent only a small percentage of total gas consumption in Europe, each hit to supply highlights the vulnerability of the region and the urgent need for the European Union to disassociate itself from the vast Russian energy reserves.

"Now that we start to see these different problems, this illustrates why Europe should not take gas supply for granted," Simone Tagliapietra, a member of the Bruegel think tank, told CNN Business.

"Governments must now act as if they were in an emergency situation," she added.

Russia imposed sanctions on 31 foreign companies on Wednesday, according to the state news agency RIA Novosti.

Gazprom Germania and EuRoPol Gaz, the operator of the Polish section of the Yamal-Europe gas pipeline, were on the list.

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"There will be no relations with these companies, they are simply prohibited," Kremlin spokesman Dmitry Peskov said Thursday.

German Economy Minister Robert Habeck, whose country is one of the main buyers of Russian gas, said Russia had stopped supplying Gazprom Germania subsidiaries but had secured alternative supply.

Dutch natural gas futures prices, the European benchmark, briefly rose 14% on Thursday morning but have since dropped again, according to data from the Intercontinental Exchange.

Events show Russia's growing audacity to cut off its energy exports to Europe.

Last month, Moscow turned off the taps to Poland and Bulgaria, making good on President Vladimir Putin's promise to cut off gas flows to "unfriendly" countries that refused to pay their bills in rubles, rather than euros or dollars. established in their contracts.

In 2021, Russia accounted for about 45% of Europe's total gas imports.

The European Union aims to reduce its consumption of Russian gas by 66% by the end of the year, but has not yet presented a detailed plan on how to achieve it.

• Europe is planning to get rid of Russia's oil.

  Will the gas follow after?

Ukraine turns off the taps

Despite the war raging for more than two months, gas from Russia has continued to flow west, much of it through pipelines in Ukraine.

But late on Tuesday, Ukraine's gas transmission system operator said it had suspended gas shipments through its Sokhranivka transit point, which processes up to 32.6 million cubic meters a day.

That's about a third of the Russian gas that flows through Ukraine to Europe.

The Ukrainian operator blamed "interference by the occupation forces" in announcing the suspension of the route.

He accused Russian forces of manipulating the transit point and diverting the gas.

As a result, the operator said that the "stability and safety of all Ukrainian gas transportation" had been compromised, and he was forced to suspend gas flows.

It was not clear when the flow of this fuel through Sokhranivka would resume.

The broader impact is, for the time being, limited.

Although Ukraine transports in total about 30% of Russia's gas supply to Europe, according to the Independent Commodity Intelligence Services, the affected pipeline represents only 2.3% of Europe's total gas supply.

The modest market reaction was largely due to good gas storage levels, favorable weather and a record volume of liquefied natural gas imports into Europe last month, said Tom Marzec-Manser, head of gas analysis at ICIS.

"The market is pretty well supplied at the moment, all things considered," he said.

However, the closure raises the uncomfortable prospect of further gas supply disruptions in Europe as fighting continues.

The fallout could roil markets and push already high energy prices higher still.

Redirection of gas flows

According to Kateryna Filippenko, principal global gas supply analyst at Wood Mackenzie, the closure of Sokhranivka creates a shortage of 16 million cubic meters a day.

But "there is enough physical capacity to fully compensate for this disruption," she told CNN Business.

The Ukrainian gas operator said it could increase gas volumes at another transit point, called Sudzha, which is further west in Ukraine's government-controlled territory.

But Gazprom has refused to reserve additional flows via this alternative route, saying it would be "technically impossible".

Video summary of the war Ukraine - Russia: May 11 20:31

However, Filippenko said the impact would be slight and Europe should continue to meet its gas storage targets by the end of this year.

EU gas storage facilities are 37% full, according to data from Gas Infrastructure Europe.

This is a normal figure for the time of year, but far from the 80% target set by the bloc for November.

More closures?

Analysts say that, with the war ongoing, further cuts to the most important gas transit routes cannot be ruled out.

Tensions could rise further next week, when more European energy companies are due to make gas payments to Russia, Bruegel's Tagliapietra said.

"We are still waiting for the EU Commission to say whether the payment in rubles is a sanctions violation or not," he added.

"So in the next two weeks we could see possible disruptions, we can't take gas supply for granted."

Kaushal Ramesh, a gas and liquefied natural gas analyst at Rystad Energy, told CNN Business that the European Union should create a buyers' alliance, in which countries jointly source gas shipments from all suppliers, "as soon as possible." " to prevent countries from competing for the same supplies of this fuel and driving up prices.

Countries in Central and Eastern Europe would be the most directly affected by the drop in Russian gas flows through Ukraine, according to a research note by consultancy Eurasia Group.

Germany, the bloc's biggest economy, is especially dependent on Russian natural gas but is relatively spared from the latest Sokhranivka shutdown.

Most of its gas imported from Russia is transported through the Nord Stream 1 pipeline that crosses the Baltic Sea, Susanne Ungrad, a spokeswoman for the Ministry of Economy, told CNN on Wednesday.

Benjamin Brown, Nadine Schmidt, and Anna Chernova contributed to this article.

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