European gas benchmark futures dropped almost 5% as Russian gas giant Gazprom announced it is resuming supplies to Italy via Austria after resolving regulatory issues that were halting transit flows.
In a statement posted on Thursday, Gazprom said that it found a solution with Italian buyers to overcome the regulatory changes made in Austria last month.
European benchmark Dutch TTF gas futures fell by almost 5% as the news came out.
“Gazprom, jointly with its Italian buyers, has managed to find a solution regarding the format of cooperation against the background of regulatory changed that were introduced in Austria in late September this year,” Gazprom said on Telegram.
Italian energy provider Eni
confirmed that flows had been begun again, in a statement on its website.
“The resumption of supplies was made possible by the resolution, by Eni and the parties involved, of the constraints deriving from the new legislation introduced by the Austrian regulatory authorities,” the firm said.
The spat began last weekend when Gazprom said deliveries have been suspended, just days after Russian gas pipelines Nord Stream 1 and 2 were sabotaged causing major gas leaks in the Baltic Sea.
The issues between Gazprom and the Austrian government have been ongoing over regulatory and contractual signings. The Austrian government stated Gazprom had not signed the contracts required, Reuters reported.
Eni CEO Claudio Descalzi maintained that the issue “has absolutely nothing to do with geopolitical factors”.
The new Austrian legislation now required Gazprom to pay a monetary guarantee to the Austrian operator for gas deliveries, approximately €20 million ($19.9 million), according to Descalzi.
He said at an event on Monday that the suspension of gas flows were because Gazprom refused to pay the guarantee.
Gazprom added in its statement: “The Austrian operator has signaled its readiness to confirm the transport nominations of Gazprom Export, making it possible to resume the supplies of Russia gas across Austria.”
Meanwhile in France, the regulator CRE has said though the country’s gas storage facilities have hit 99% for the winter ahead, users should still try to conserve energy due to the ongoing market tensions and high prices.
The CRE said suppliers had amounted 130 terawatt-hours of gas reserves, which comprises gas consumption for two-thirds of French citizens and small to medium sized companies.
It added that storage will be full with gas imports from Norway, liquefied natural gas imports and exchanges with other countries during the winter season.