Gas prices have risen on fears that Russia could halt supplies to Europe through Ukraine, adding to turmoil caused by damage to the Nord Stream pipelines under the Baltic Sea. The Kremlin-controlled gas company Gazprom said it could impose sanctions on Ukraine’s Naftogaz due to ongoing arbitration. The statement came after the discovery of leaks on the two Nord Stream gas pipelines under the Baltic Sea near the Danish island of Bornholm in a suspected act of sabotage, although exactly by whom or why remains unconfirmed. The Dutch gas price for delivery next month – the European benchmark – was up €16.10 at €200.1 per megawatt hour (MWh) on Wednesday and the British equivalent was up by 24.75p at 290.25p per therm. Gazprom said it had rejected all claims from Naftogaz in arbitration proceedings over Russian gas transit, and had notified the arbitration court. It also said Russia could introduce sanctions against the Ukrainian energy company, which would prohibit Gazprom from paying Kyiv the transit fees if it further pursues an arbitration case over gas transit. Russian gas travels into Europe via Ukraine via several key routes, including the Brotherhood, Soyuz and Yamal-Europe pipelines. Transgas, which starts in the west of Ukraine and flows into Germany, could also be affected. Russian gas flows through Ukraine have been steady at about 42m cubic metres a day in recent weeks. Gas prices had already been pushed higher this week on the surprise news of the leaks in the Nord Stream pipelines. However, although Nord Stream 2 contained gas, it had never started up commercial operation, while flows via Nord Stream 1 have been halted since late August, limiting the immediate impact of the damage. Flows via those routes are now seen as unlikely to return. Denmark and Sweden have said major leaks on the two pipelines in the Baltic Sea were caused by deliberate acts of sabotage carried out in each of the two countries’ exclusive economic zones. A western official told Reuters: “The multiple explosions at the same time – it’s very serious, and is going to have to be investigated.” Norway’s Equinor, Europe’s largest gas supplier, said on Wednesday it had stepped up security measures at its installations after the suspected sabotage. The Kremlin said claims that Russia was behind a possible attack on the Nord Stream gas pipelines were “predictably stupid”. Analysts at Refinitiv said the impact of the current UK cold snap has been mitigated by increased Norwegian flows and supplies of liquefied natural gas imported from around the world. However, the pound’s plunge against the dollar will increase the cost of the gas bought in dollars for British importers. The surge in the price of gas came after weeks of declines in its price, buoyed by an improving picture for European supplies this winter due to efforts to fill up storage facilities. However, industry watchers are concerned that by next spring, European gas facilities could be nearly empty without any Russian gas to refill them.