Gazprom Germania headquarters: The German government has nationalized the supplier © REUTERS

European gas prices rose above €100 per megawatt-hour on Thursday due to new uncertainties over gas flows from Russia to Europe.

The concerns reflect Moscow’s imposition of sanctions on key gas companies that Berlin has seized control of and disrupted gas pipelines through Ukraine.

Futures contracts linked to TTF, Europe’s wholesale gas price standard, rose more than 12% to €106/megawatt-hour, up from around €90/megawatt-hour earlier in the week as the country’s gas supplies surged. Russia presents the continent with new threats.

Late on Wednesday, the Kremlin imposed sanctions on Gazprom Germania, a collection of companies formerly owned by Gazprom, Russia’s state-owned gas company, which Berlin took over on last month. The new law prevents Russian entities from selling gas or dealing with certain Gazprom Germania companies.

Astora, one of its subsidiaries, is one of the largest owners of underground gas storage in Germany, and Wingas, WIEH and WIEE, which are also subject to Moscow’s sanctions, are distributors. Gas distributor in Germany has a large transaction with Gazprom.

The German government has yet to determine the impact the sanctions may have on gas supplies. Andrei Belyi, a gas consultant at Balesene based in Estonia, said that the Russian state had “increasing the level of uncertainty for European buyers and consumers”.

That comes after Ukraine’s pipeline operator a day earlier shut down gas flow through one of the two main pipelines bringing Russian gas through the country to Europe.

Gas traders have focused for weeks on a new ruble payment mechanism demanded by Russia, which has already cut off supplies of Russian gas to Poland and Bulgaria. Stocks could flare up again at the end of May as payments come due from more European buyers.

Due to uncertainty over Russian gas supplies, German electricity prices next Thursday hit a year-to-date high of 227.75 euros per megawatt hour, according to Refinitiv. Electricity prices tend to lead to higher gas prices.

Line charts of Traders worried about flows from Russia to Europe show soaring European gas prices


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