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Russia is using gas as 'weapon of war,' says French ecology minister, as Gazprom suspends delivery

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By Euronews  with Reuters
A Russian construction worker smokes in Portovaya Bay some 170 kms north-west from St Petersburg, 9 April 2010
A Russian construction worker smokes in Portovaya Bay some 170 kms north-west from St Petersburg, 9 April 2010   -   Copyright  AP Photo/Dmitri Lovetsky

Russia is using energy supplies as a "weapon of war", France said on Tuesday after Russia's Gazprom cut deliveries to a major customer in the country while also planning to shut its main gas pipeline to Germany for three days this week.

Western nations fear that Moscow is deliberately driving up gas prices to try to weaken their opposition to its invasion of Ukraine, a tactic Ukrainian President Volodymyr Zelenskyy on Monday dubbed "economic terrorism". 

"Very clearly Russia is using gas as a weapon of war and we must prepare for the worst case scenario of a complete interruption of supplies," France's Energy Transition Minister Agnes Pannier-Runacher said.

She was speaking to France Inter radio after French utility Engie said it would receive less gas from Gazprom from Tuesday because of an unspecified contractual dispute.

By Tuesday evening, the Russian gas giant announced that it will suspend its gas deliveries to Engie from Thursday due to the French company's failure to pay for all deliveries made in July.

"Gazprom Export has notified Engie of a full suspension of gas deliveries from 1 September, 2022 until the receipt in full of the financial sums due for the deliveries," the Russian group said in a statement published Tuesday evening on its Telegram account.

Moscow has insisted that European countries should pay for Russian gas in roubles -- a way to keep its currency afloat amid severe Western sanctions due to its aggression against Ukraine.

Nord Stream 1, the main conduit for Russian gas into Europe, has become a flash point in the dispute. Europe faces a further squeeze on supplies this week as Gazprom shuts off the pipeline for maintenance from Wednesday till the early hours of Saturday.

Russia has been pumping gas via Nord Stream 1 at only 20% of capacity and there are fears that this week's outage could be extended.

Kremlin spokesman Dmitry Peskov said on Tuesday that technological problems caused by Western sanctions on Russia are the only thing standing in the way of supplying gas via Nord Stream 1.

European governments are trying to coordinate a response to soaring energy costs for businesses and households and to fill storage facilities ahead of peak demand in the winter.

'Prices are insane'

EU energy ministers will hold an emergency meeting on 9 September to discuss the crisis.

Germany, Europe's largest economy, is open to discussing a price-cap scheme on gas supplies at a European level, a source in Italy told Reuters, citing a text message Germany's economy minister sent to his colleagues across the bloc.

The source said Robert Habeck sent a message to EU energy ministers flagging that Berlin was open to discuss the price cap at next week's meeting.

Italian Prime Minister Mario Draghi has been pushing for a price cap and has also called for steps to decouple the cost of electricity from the gas price. Such a move would allow European households to get the benefits from electricity produced from cheaper sources such as renewables.

The chief executive of German energy firm Wintershall Dea said on Tuesday that current price levels meant demand for gas would fall in the long term.

"The prices we are having currently are insane. That is nothing even a gas producer is looking for because in the end, we are going to massively destroy demand for our product," Mario Mehren told reporters on the sidelines of a conference in Norway.

Benchmark Dutch wholesale gas prices rose on Tuesday afternoon after an initial retreat. The front-month gas contract was up 1.5% at €271/MWh, off all-time highs hit last week but still trading at levels more than five times those seen a year ago.