Russia cuts off gas supplies to French energy giants

Russian state-owned energy giant Gazprom confirmed on Tuesday that it had halted gas supplies to French utility Engie. The Paris-based company did not fully pay for gas supplies in July, the St. Petersburg major said.

Gazprom told Engie that it will halt gas supplies from September 1 until it receives full payment for the gas already supplied, the energy giant said in a statement. It also noted that the French side had not made the payment by Tuesday evening, making further gas supplies impossible under Russian law.

Earlier in the day, Engie warned that Gazprom informed it “a reduction in gas supplies‘ and quotes ‘a disagreement between the parties on the application of some contracts‘ according to Bloomberg. It gave no details on the nature of the disagreements and did not specify the level of delivery restrictions.

French Energy Minister Agnes Pannier-Runacher on Tuesday accused Moscow of using its gas exports as a weapon. She also said that France “must be prepared for the worst-case scenario of a complete supply disruption.” Her statement was made before the Gazprom announcement.

Engie kept it “had already secured the volumes needed to meet its commitments to its customers and its own needs,” added that it would take action to “Significantly reduce direct financial and physical impact” the possible supply disruption by Gazprom.

The developments come as EU governments try to fill up their gas storage facilities amid the approaching heating season and reduced supplies from Russia – one of the continent’s biggest gas suppliers. Gazprom also said earlier on Tuesday that Nord Stream 1 would be completely halted for maintenance from August 31 to September 2 as it only had one operational compressor.

On Monday, Engie executive vice president Claire Waysand said France was 90% full of its stocks, adding that this should be enough to get through the winter.