Gazprom Cuts Flows via Opal Gas Pipeline After Polish Challenge Upheld

Russian gas deliveries to Germany via the Opal pipeline fell by around 30 percent on Wednesday after Poland successfully blocked a deal giving Gazprom a bigger share of the pipeline's capacity.

Gazprom sends gas through the Nord Stream pipeline which runs along the Baltic Sea bed and links up with Opal in Germany but the Russian gas exporter faces curbs imposed by the European Union on how much of Opal it can use.

Last year the EU approved a deal between Germany's energy regulator and Gazprom giving the producer access to more than its 50 percent share of Opal's capacity through a mechanism of monthly auctions that lifted exports.

Some 80 percent of the pipe's 55 billion cubic metres/year capacity was used in 2016, data shows.

But the European Court of Justice in December suspended the EU approval to give Gazprom as Opal's co-owner more of the pipeline's capacity, which had been granted in November, after an appeal from Poland.

Poland, which imports most of its gas from Russia, criticised the EU's approval saying the deal threatened gas supplies to central and eastern Europe.

"Gas transportation via the Opal gas pipeline was reduced in relation to the annulment of February gas auctions in accordance with a European court decision," Gazprom spokesman Sergei Kupriyanov said.

Flows through Gazprom's other routes to Europe were unaffected, he said.

An Opal spokeswoman confirmed the reductions were linked to Poland's legal challenge.

Supplies through the Opal pipeline reach customers in Germany and the Czech Republic. The Court's decision means that for now, Gazprom will not be able to exercise the right to increase its capacity on the pipeline.

Data on Wednesday showed that gas flows through the Opal pipeline fell by 27 million cubic metres/day (mcm/day) to 64 mcm/day.

Poland's state-run gas firm PGNiG, which successfully appealed against the EU decision, declined to comment.

Short-term gas prices in Britain and the Netherlands rose due to falling Russian deliveries, cold weather forecasts and already tight supplies, traders said.