Russia Says It Thwarted Attack on Energy Link

Russia Says It Thwarted Attack on Energy Link
Russia has already cut shipments to Europe through major pipelines.

Russia’s security service said it thwarted a planned Ukrainian attack on infrastructure delivering energy to Turkey and Europe -- a claim Kyiv denied.

The gas market is particularly sensitive to this kind of developments as Moscow has used disruptions at energy infrastructure in the past to justify curtailments to supplies. The security services of the two countries have traded similar accusations in the past. 

The Russian Federal Security Service, known as FSB, “prevented an attempt by the Ukrainian special services to commit a sabotage and terrorist act at the facility of the oil and gas complex that supplies energy to Turkey and Europe,” according to a statement on its website Thursday. A Russian citizen was detained, who the nation’s security service claimed was recruited by Ukraine’s special service.

A representative of Ukraine’s State Security Service said the organization wouldn’t comment on what he described as fantasies of the Russian special services.

European benchmark futures swung between gains and losses, and were 0.4% higher as of 11:25 a.m. in Amsterdam.  

“The market is possibly treating comments of that nature with a massive pinch of salt,” Tom Marzec-Manser, head of gas analytics at ICIS in London, said about the FSB’s statement. A potential for further disruptions in supplies from Moscow through other routes, not just the key Nord Stream pipeline that is currently shut, was already reflected in a price rally in August, he said. 

The FSB didn’t provide any detail about what infrastructure it claims was targeted. The only route that supplies Russian energy both to Turkey and Europe is TurkStream, a gas pipeline across the Black Sea. Making landfall in Turkey, the link carries the fuel to a handful of European nations, including Serbia and Hungary, nations that are seen as friendly with Moscow. These markets also don’t have as big an impact on futures prices compared with those in northwest Europe.        

Russian gas supplier Gazprom PJSC didn’t immediately respond to a request for a comment.

Russia has already cut shipments to Europe through major pipelines, leaving TurkStream and capped transit flows via Ukraine as the last remaining routes. That’s some 80 million cubic meters of gas a day, or just about 20% of Russia’s normal exports to the continent.

--With assistance from Aliaksandr Kudrytski and Elena Mazneva.



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