Russia's Gazprom is shutting off all natural gas deliveries to major French utility Engie over payment dispute
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- Russia's Gazprom will shut off all natural gas supplies to France's top utility Engie from Thursday.
- Gazprom said Engie hadn't paid for July deliveries and will halt flows until the sum is settled.
- It comes as the Nord Stream 1 pipeline has shuts down for three days in Europe's energy crisis.
Russia's Gazprom said it will fully cut off all its natural gas deliveries to major French utility Engie starting Thursday, intensifying the pressure on France as it races to avert potential rationing.
Gazprom is halting the flow of gas to Engie after the French power company failed to pay in full for July deliveries, the state-run energy giant said in a statement on Telegram.
"In this regard, Gazprom Export notified Engie of the complete suspension of gas supplies starting from September 1, 2022, until the full payment for the supplied gas is received," it said Tuesday.
Engie warned on Tuesday that the Russian company was about to cut gas deliveries, but said it had already secured the supplies it needed.
Since the Ukraine war began, deliveries from Gazprom to Engie have already fallen substantially, the utility said.
Gazprom's move adds more pressure to a mounting energy crisis in Europe, as Russia chokes off gas supplies via Nord Stream 1. On Wednesday, Moscow halted gas supply via the pipeline for three days, for maintenance, after reducing its flows to just 20% of capacity in July after an earlier cutback.
Russia's rolling interruptions to Europe's gas have sent gas prices soaring in the region, up over 230% since the start of 2022, and about 1,000% higher than a year ago.
Dutch TTF futures for October, the European benchmark for natural gas, were up about 5.6% at around 280 euros ($280) per megawatt-hour at last check Wednesday. They were rising thanks to the Nord Stream 1 halt, after sliding earlier in the week as Europe's gas storage reached healthy levels.
The halts have also led governments in Europe to accuse Moscow of "weaponizing" its energy exports. They see it as a move to put economic pressure on Western countries, in retaliation to sanctions imposed on Russia after it invaded Ukraine.
"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 after Engie's warning Tuesday.
France is less dependent on Russian supplies than the likes of Germany, as the imports make up only about 20% of its consumption. In addition, the country said Wednesday it will fill its natural gas storage fully within two weeks, in line with other European countries.
But at the same time, French leaders have urged consumers and businesses to cut down consumption and to draft energy-saving plans to avoid winter rationing.
Other nations like Germany have been forced to shift back to coal to generate power and save on energy by turning off spotlights and limiting heating to deal with the crippling crisis.
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