Russia’s main gas pipeline to Germany went offline for scheduled maintenance on Monday, with fears growing that the flow of gas might not resume after the repairs are completed, threatening potentially disastrous consequences for Europe’s largest economy.
German officials admit they have no idea whether state-controlled gas export monopoly Gazprom will restart deliveries through Nord Stream 1 once the maintenance period comes to an end on July 21.
“We are getting quite different signals from Russia,” Klaus Müller, head of the Federal Network Agency, Germany’s energy regulator, told ZDF TV on Monday. Should Moscow fail to resume supplies on or around July 21 “it would look really bad”, he added.
Supplies to Italy were also reduced on Monday. Eni, the country’s biggest energy company, said that Gazprom would be supplying 21mn cubic metres of gas for the day, a drop of almost one-third compared with the average 32mn cubic metres it had been delivering over the past few days.
Government under-secretary Roberto Garofoli said the energy crisis was becoming “extremely serious” as businesses and households brace for energy rationing to mitigate the impact of the drop in supplies.
The issue of gas supplied through Nord Stream 1 has become one of the biggest flashpoints in the increasingly acrimonious relationship between Russia and Europe over Moscow’s war in Ukraine.
Last month Russia reduced the flow of gas through the underwater pipeline, which has a capacity of 55bn cubic metres a year, by 60 per cent, blaming the delayed return of a crucial turbine that was being serviced in Canada.
The move hindered Germany’s efforts to rebuild gas storage levels ahead of the winter heating season, when demand for gas is much greater.
Since Russia cut capacity on Nord Stream 1 the European benchmark TTF gas price has doubled from already elevated levels, reaching €170 per megawatt hour. Prices for the main contract for delivery next month were relatively stable on Monday, rising only 0.5 per cent.
The turbine was being repaired by its German manufacturer Siemens Energy at its plant in Montreal. But Canada blocked its shipment back to Russia, citing the sanctions it has imposed on the Russian energy sector.
Hopes of a resolution to the conflict rose over the weekend when the Canadian government granted an exemption to its sanctions allowing Siemens to transport the turbine back to Germany. Siemens Energy said it was working on approvals and logistics to have the equipment in place as soon as possible.
However, there is widespread scepticism in Berlin that the absence of the turbine is the real reason for the sudden drop in supplies. Robert Habeck, economy minister, said it was just a “pretext” and accused Russia of “weaponising” its energy exports to deliberately hurt the German economy.
For that reason, concern is growing that Russia has no intention of resuming supplies once the maintenance period for Nord Stream 1 is over.
“There are Kremlin spokesmen who say that [Russia] could supply much more in combination with the Siemens turbine,” said Müller. “But there were also very bellicose messages from the Kremlin. Honestly, no one knows.”
James Waddell, an analyst at Energy Aspects, said that when flows were reduced through Nord Stream 1, Russia had the option of routing more gas through other pipelines into Europe, such as the one via Ukraine, “but has chosen not to do so”. “The flow cut has been for political rather than technical reasons,” he said.
He said Russia could “still publicly argue that delays in receiving the parts will mean a protracted period for restoring capacity” and that “over the next few months Russia will continue to stymie European efforts to build adequate gas stocks ahead of this winter”.
Müller said a “worst-case scenario” — where Russia turned off the gas tap completely — would “unfortunately look very, very bad”. “There are several scenarios according to which we would slip into a gas emergency,” he added. “That would mean we would have too little gas.”
European Commission spokesman Tim McPhie described the Nord Stream 1 shutdown as part of a broader picture of supply disruptions, with 12 EU countries currently being fully or partially cut off from Russian gas.
“The situation is clearly serious, and we need to be adequately prepared for any eventuality,” McPhie said. “We know gas supplies are being weaponised by Russia.”
The commission is planning to table proposals in mid-July on how EU countries should co-ordinate their industrial energy rationing and which categories of users to prioritise when faced with even fewer supplies.
Additional reporting by Valentina Pop and Silvia Sciorilli Borrelli
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2022-07-11 14:01:34Z
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