Russia to stop gas supplies via Nord Stream to Europe, citing maintenance
Price chart futures on the spot TTF gas index on the ICE Futures exchange (in US dollars per thousand cubic meters) at intervals of 4 hours
Unexpected economic impact in Germany and much of Europe to increase gas reserves and prevent rationing to keep the population warm during the long continental winter – and prevent factory shutdowns.
Moscow has already been consuming supplies through the pipeline – Europe’s most important gas pipeline – up to 20% of its high capacity, citing technical problems with its turbines. German and European officials dismissed this explanation and cited the possibility of an economic attack in retaliation for supporting Ukraine in the conflict with Russia.
Gazprom said on Friday that the maintenance will take place from August 31 to September 2, and if there are no malfunctions, it will restore request flows.
European gas prices, trading at record highs, rose even more on the news, with gas futures trading in the Netherlands, a benchmark in Northwest Europe, jumping more than 5%.
Gas is used in power plants, to heat homes and factories, smelters and fertilizer plants. Analysts and officials warn that if Russia cuts off gas supplies over the winter, Europe’s fragile economy is likely to be imported into recession. Soaring electricity prices have forced some industries in Europe to announce work consumption this week, including energy-intensive metal forging operations.
The temporary shutdown has not been previously announced and comes weeks after the 760-mile Nord Stream, which connects Russia’s rich Siberian gas fields with Germany under the Baltic Sea, was shut down for 10 days of annual maintenance.
Upon completion of the work, Gazprom restored the flow, but only up to 40% of the pipeline’s throughput. The company later reduced this to 20%, saying it couldn’t maintain flow without a proper turbine that was being serviced in Canada. It is of little use, other than the fact that the other turbines also need maintenance.
German Chancellor Olaf Scholz dismissed the claim, stating that Russia had refused to take delivery of the turbine. He stated that there were no technical or legal implications for reducing gas emissions.
The Kremlin said that Russia must be sure that the turbine is not subject to the verdict and will not be turned off remotely under the pretext of receipt. He has repeatedly denied accusations that Gazprom interfered with the gas supply in order to obtain a volume of political leverage in the investigation.
On Friday, Gazprom said the only remaining turbine at the pipeline’s compressor station was due for maintenance, calling it a routine procedure that requires 1,000 turbine hours to be used.
Germany’s federal grid agency, which regulates the country, announced on Friday that it has taken note of Gazprom’s report and is monitoring compliance with the laws.
First opened in 2011, Nord Stream has a capacity of 55 billion cubic meters per year, enough to cover 10% of the European Union’s annual consumption.
There are other pipelines from Russia to Europe, but the flows are on schedule. In May, Ukraine sent one gas transit route, blaming Russian interference. Deliveries through another gas pipeline called Yamal, which historically transported gas from Russia to Europe, have been widely this year due to meetings that took over from the Polish co-owner.
Before the military conflict, the European Union imported about 40% of its gas from Russia. covering all of Europe receives gas from other interests, including Norway, Algeria, the US and Qatar, which is often used in the form of liquefied gas pool transported by sea.
Germany is building several terminals on the coast to receive cargo and chartered terminals that can handle these flows in the short term.
The country has taken other steps to get through the winter. In addition to the loss on conservation, Germany intends to delay the closure of the country’s last three nuclear power plants as it anticipates the possibility of an energy shortage.
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