scorecardRussia's Gazprom is cutting gas supply to a top French utility after France's leader warns of rationing
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Russia's Gazprom is cutting gas supply to a top French utility after France's leader warns of rationing

Zahra Tayeb   

Russia's Gazprom is cutting gas supply to a top French utility after France's leader warns of rationing
Stock Market2 min read
Pipes at the landfall facilities of the 'Nord Stream 2' gas pipeline are pictured in Lubmin, northern Germany, on Feb. 15, 2022.    AP Photo/Michael Sohn, File
  • Russia's Gazprom is cutting its natural gas supply to one of France's biggest utility firms, Engie.
  • The cut starts Tuesday and comes after a contractual disagreement, according to Engie.

Russia's Gazprom has told major French utility Engie that it is cutting gas deliveries starting Tuesday, turning up the pressure as Europe scrambles to secure supplies for the winter.

The Kremlin-run energy giant is reducing flows to France over a contractual disagreement, according to Engie.

France, along with other European countries, has been battling a crippling energy crisis as Russia squeezes gas supply to the continent. Moscow is seen as retaliating to Western sanctions imposed over the Ukraine war.

Since war broke out, deliveries from Gazprom to Engie had already fallen substantially, the utility said. France is less dependent on Russian supplies than the likes of Germany, as the imports make up only about 20% of its consumption.

"As previously announced, Engie had already secured the volumes necessary to meet its commitments towards its customers and its own requirements, and put in place several measures to significantly reduce any direct financial and physical impacts that could result from an interruption to gas supplies by Gazprom," Engie said in a statement Tuesday.

Even so, Gazprom's move piles the pressure on France over its energy troubles, as it searches for alternative sources of supply before winter drives up demand.

Engie is working on an agreement with Algeria for additional natural gas imports, a deal that could increase deliveries by 50% if it comes to pass, Bloomberg reported. In May, Engie signed an agreement with a Texas LNG provider for gas supplies.

On Monday, France's prime minister warned companies to come up with plans to save energy by September. If not, they could be first to be hit with rationing of gas and electricity supply, Elisabeth Borne said at a conference near Paris, per Reuters.

Borne said Moscow could slash gas supplies at any time in the coming months. France could be faced with "brutal gas outages overnight and serious economic and social consequences," she said.

Gazprom slashed the capacity of the Nord Stream 1 gas pipeline to just 20% in July, and said it intends to shut it down entirely for three days starting Wednesday.

Borne's pleas come after French President Emmanuel Macron called on French citizens to curb their energy consumption or struggle during a grueling winter.




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