Natural Gas Pipelines Hit by Artillery Fire in Eastern Ukraine

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By Tsvetana Paraskova for Oilprice.com

hree natural gas pipelines were damaged overnight by artillery fire in Ukraine’s self-proclaimed eastern republic of Donetsk, Russian media reported on Friday, citing gas supplying company Donbassgas.

Repair units are working to fix damages, according to Russia’s Tass news agency.

Relations between Ukraine and Russia have been greatly strained since 2014, and the two countries have been on a de facto war footing since Russia annexed Crimea, which triggered western sanctions against the Russian Federation.

Earlier this week, tension boiled up again, with Ukraine’s President Petro Poroshenko warning of a possible invasion by Russia, a week after Vladimir Putin accused Ukraine of using “terror” tactics in Crimea.

This close-to-complete-war warning by Ukraine, however, failed to move gas prices up, instead continuing its decline, signaling that there is a gas glut on the European market.

Ukraine, which is the crossroads of Russia’s gas supplies to Europe, has around 40 percent of European supplies flowing from Russia through pipelines on its territory.

Last week, Gazprom’s partners in the Nord Stream-2 pipeline project gave up the merger plan that would have seen Gazprom, Shell, OMV, French Engie, and German Uniper and Wintershall combine into a consortium to build a gas pipeline under the Baltic Sea on to Germany, thus bypassing Ukraine.

The change of plans was prompted by opposition from the Polish anti-monopoly regulator, which said earlier this year that such a consortium would unduly increase Gazprom’s already substantial influence over the Central European energy market and create an environment that could stimulate unfair competition.

Earlier this month, Poland started supplying Ukraine with natural gas. Both countries are planning on increasing the amount of gas that is exchanged between their systems. Ultimately, their goal is to connect the LNG terminal on Poland’s Baltic Sea to both central and eastern European countries.

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