Deliveries through the Nord Stream 1 pipeline, which accounts for more than a third of Russian gas exports to the EU, are set to resume on Thursday after a 10-day shutdown for annual maintenance. But supplies through that route had fallen even before the maintenance shutdown in a dispute over certified parts and may now fall further, while flows through other routes, such as Ukraine, have also fallen since Russia invaded its neighboring country in February. Sign up now for FREE unlimited access to Reuters.com Register The disruptions have hampered Europe’s efforts to refill natural gas stores before winter, raising the risk of a rationing build-up and another blow to fragile economic growth if Moscow cuts further flows in retaliation for Western sanctions over the war on Ukraine. The European Commission proposed a voluntary target for all EU states to reduce their gas use by 15% from August to March, compared to their average consumption over the same period in 2016-2021. “Russia is blackmailing us. Russia is using energy as a weapon. And so, in any case, whether it’s a partial, major cut-off of Russian gas or a complete cut-off of Russian gas, Europe needs to be ready.” said European Commission President Ursula von der Leyen. The proposal would allow Brussels to make the target mandatory in the event of a supply emergency if the EU declares a significant risk of severe gas shortages. read more The move, which needs the support of EU states, will be discussed on Friday so ministers can approve it at an emergency meeting on July 26. “We believe that a full-blown upheaval is possible, and it is especially likely if we don’t act and leave ourselves vulnerable to it,” an EU official said. “If we wait, it will be more expensive and it will mean that we will be dancing to Russia’s tune.” . EU states are trying to ensure that storage facilities are 80% full by November 1, up from around 65% now, according to figures. https://tmsnrt.rs/3RMqnZg European politicians say Russia is using technical issues as a pretext to reduce deliveries. The Kremlin says Russia remains a reliable energy supplier and has blamed the reduced flows on sanctions. Two Russian sources familiar with Russia’s export plans said flows through Nord Stream 1 were expected to resume on time on Thursday, after being stopped on July 11 for annual maintenance. But they said it would be below its capacity of 160 million cubic meters (mcm) per day. Kremlin-controlled Gazprom ( GAZP.MM ) cut gas exports through the route to 40 percent capacity in June, blaming delays in returning a turbine serviced by Siemens Energy ( ENR1n.DE ) to Canada.
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That turbine, which had been caught up in sanctions, was reported this week to be on its way back, although Gazprom said on Wednesday it had not received documentation of its reinstallation and said the return of the turbine and maintenance of other equipment was required to keep the pipeline running safely. read more Putin suggested there could be a further reduction in supplies through the pipeline that runs under the Baltic Sea to Germany, Europe’s economic powerhouse that has relied heavily on Russian fuel, heightening concerns about European supply. read more Natural gas prices have soared in volatile trade since the crisis erupted in Ukraine. The first-month gas contract rose above 160 euros per megawatt-hour (MWh) on Wednesday, 360% higher than a year ago, but below the March peak of 335 euros. The price hike has put pressure on utility companies causing bankruptcies. In Germany, the government plans to inject billions of euros into the country’s biggest buyer of Russian gas, Uniper ( UN01.DE ). read more Putin said there were five natural gas pumping units operated by Siemens Energy in Nord Stream 1 and one more unit was out of service due to “crushing of the internal liner”. “There are two working machines there, pumping 60 million cubic meters per day… If one is not returned, there will be one, which is 30 million cubic meters. Does Gazprom have anything to do with this?” he said. Putin said another of the gas-pumping turbines was due to be sent for maintenance on July 26. He also said that Gazprom, which has a monopoly on Russian gas exports via pipelines, was not responsible for the reduction in gas transit capacity through a network of pipelines to Europe. He blamed Kyiv for closing a route through Ukraine, although Ukrainian authorities blame the closure on the Russian invasion. Siemens Energy said maintenance of the turbines for Nord Stream 1 would normally be a routine matter. He said he would continue to maintain sanctioned equipment if possible and where required, and would operate as quickly as possible. read more In a shift to the east, Gazprom said on Wednesday that Russian gas supplies heading to China via the Power of Siberia pipeline hit a new daily record. Moscow has expanded capacity to supply China even as deliveries to Europe decline, although Russia’s Far Eastern network is not connected to the European supply system. European nations, meanwhile, are chasing alternative supplies, although the global gas market was tight even before the Ukraine crisis, with demand for the fuel recovering from a pandemic-induced slump. Those efforts included seeking more natural gas from suppliers connected to Europe via pipelines, such as Algeria, and by building or expanding more liquefied natural gas (LNG) terminals to receive shipments from much further afield, such as the United States. Sign up now for FREE unlimited access to Reuters.com Register Report from Reuters offices. Edmund Blair writes. Edited by Carmel Crimmins Our Standards: The Thomson Reuters Trust Principles.
