Russia's Gazprom says gas flows to Europe will stay shut after G7 agreed price cap to choke Putin's war machine
Russia's Gazprom has said natural gas supplies to Europe via the Nord Stream 1 pipeline will remain shut off.
It
comes after G7 finance ministers agreed to impose a price cap on
Russian oil exports in an effort to limit funding for President Vladimir
Putin's war in Ukraine.
Gazprom said it was not reinstating supplies to Europe because the main
gas turbine at Portovaya compressor station near St Petersburg could not
operate safely until a leak was repaired. It did not say when supplies
would be restarted.
Moscow has blamed sanctions imposed by the West after Russia invaded
Ukraine for hampering routine operations and maintenance for Nord Stream
1. However, Brussels has said that is a pretext and Russia is using gas
as an economic weapon to retaliate.
Germany's network regulator said the country was better prepared for a
stop of Russian gas supplies, but urged citizens and companies to cut
consumption.
"In view of the Russian decision not to allow any gas to flow via Nord Stream 1 for the time being, the LNG terminals,
the
relevant storage levels & significant savings requirements are
becoming more important," Klaus Mueller, president of the
Bundesnetzagentur, tweeted. "It's good that Germany is now better
prepared, but now it's down to each and everyone."
The G7 decision was made at a virtual meeting of the group, made up
of seven of the world's richest countries - the UK, US, Canada, Italy,
France, Germany and Japan - on Friday afternoon.
Confirming the
news, Chancellor Nadhim Zahawi said: "We will curtail Putin's capacity
to fund his war from oil exports by banning services, such as insurance
and the provision of finance, to vessels carrying Russian oil above an
agreed price cap."
The price cap has not yet been decided.
Despite selling less oil since the invasion of Ukraine in February,
Russia made £600m more from oil sales in June than it did in the
previous month because of rocketing prices pushed up by the war.
As well as limiting Russia's revenues, it is hoped the price cap can also bring down rising energy prices around the world.
Speaking after the announcement, Mr Zahawi said the move will "protect our citizens from oil price shocks next year".
He added: "That is a significant step forward.
"It
will mean that Putin can't profiteer from excessively high oil prices
and of course, protect all of us from oil price shocks next year and
beyond."
Putin's strategy will not work'
The G7
decision comes after Mr Zahawi met with Treasury Secretary Janet Yellen
in Washington on Wednesday for talks on how to tackle the spiralling
cost of living crisis.
Sky News understands that the meeting was important in getting the two countries in lockstep over the price cap.
Mr
Zahawi said G7 ministers would be discussing strategies to implement
the cap in December, then putting it in place in February.
Energy bills will soar for millions of UK households before then, after Ofgem hiked up its October price cap by 80% - plunging many into financial hardship.
The Nord Stream 1 gas leak Gazprom says is in one of the engines at at Portovaya compressor station. Pic: Gazprom
