- Pipeline will be halted from August 31st to September 31st. 2 for maintenance
- The disclosure comes as gas flows have dropped to 20%
- Move increases Europe, Moscow’s energy patch
FRANKFURT/BERLIN, Aug 19 (Portal) – Russia will halt natural gas supplies to Europe via its main pipeline to the region for three days at the end of the month, state-owned energy giant Gazprom (GAZP.MM) said on Friday, increasing pressure on the Region trying to refuel before winter.
The unscheduled maintenance of the Nord Stream 1 pipeline, which runs under the Baltic Sea to Germany, is deepening the energy crisis between Moscow and Brussels, which has already helped push up inflation in the region and increase the risk of rationing and recession raise.
Gazprom said the shutdown was due to the pipeline’s only remaining compressor requiring maintenance. Gas flows via other pipeline routes have also declined since Russia invaded Ukraine in February, with Moscow declaring a “military special operation”.
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The move will bring further disruption, particularly for Germany, which largely depends on supplies from Moscow for its industry. The European Union has accused Russia of using energy as a weapon. Moscow has denied the accusation, blaming sanctions for the drop in exports.
“We are monitoring the situation closely with the Federal Network Agency,” said a spokesman for the Federal Ministry of Economics. The Biden administration did not immediately respond to requests for comment.
The shutdown, which is scheduled to run from August 31 to September 31. 2, follows a 10-day maintenance cut in July and raised concerns over whether Russia would resume deliveries that had been reduced since mid-June.
The Ukrainian gas transmission system operator said that it and the Polish gas pipeline system have the capacity to compensate for the Nord Stream stoppage and let Russian gas reach Europe.
Germany was forced to grant Uniper (UN01.DE) – its largest importer of Russian gas and the most prominent victim of Europe’s energy crisis to date – a 15 billion euro ($15.1 billion) bailout after Russia drastically cut supplies and it had been forced to buy gas elsewhere at much higher prices. Continue reading
Germany’s broader economic impact was highlighted in Friday’s producer price data, which posted July’s highest-ever rises both year-on-month and month-on-month as energy costs soar.
The Nord Stream pipeline was already operating at just a fifth of its capacity, fueling fears that Russia could completely halt inflows during the winter heating season and make it harder to fill storage facilities.
Before Gazprom announced the shutdown, gas prices in Europe remained near five-month highs, while US gas prices reversed course, settling around 1.2% after the news.
GERMAN DEPENDENCE
Germany has made a concerted effort to fill up its stores in preparation for winter, with figures standing at 78% on August 17, slightly higher than the roughly 76% for the European Union as a whole.
Flows of 33 million cubic meters (mcm) per day – in line with current volumes – will resume after maintenance work is completed and “without technical disruptions,” Gazprom said.
The restart volume would be only 20% of Nord Stream’s full capacity of 167 million cubic meters per day.
Gazprom announced that maintenance work on the remaining gas compression station Trent 60 would be carried out jointly with Siemens Energy (ENR1n.DE). The Russian firm previously blamed lower flows on faulty or delayed equipment. Germany says this is an excuse to hurt its economy.
Siemens, which is responsible for maintaining the Nord Stream 1 turbines, declined to comment.
One of the Nord Stream 1 turbines is stuck in Germany after being serviced in Canada. Germany has said it could be transported, but Moscow keeps saying sanctions have prevented the equipment from being sent back to Russia. Continue reading
Earlier, senior German politicians had dismissed suggestions that gas shortages could be alleviated by bringing the decommissioned Nord Stream 2 pipeline online, which the Kremlin has proposed as a solution.
“I strongly suggest that we spare ourselves the humiliation of always asking Putin for something we won’t get,” said Kevin Kühnert, number two of Chancellor Olaf Scholz’s Social Democrats.
“Dependence on him must stop once and for all,” he added in an interview with the website t-online.
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Reporting by Christoph Steitz and Thomas Escritt; Edited by Kirsten Donovan, David Holmes and Marguerita Choy
Our standards: The Thomson Portal Trust Principles.
Thomas Escrit