A scheduled outage on the largest single pipeline carrying Russian gas to Germany began on July 11 and is expected to end at 06:00 CET (04:00 GMT) on July 21. It carries 55 billion cubic meters (bcm) of natural gas per year under the Baltic Sea. If the outage is extended, the operator Nord Stream AG should make this clear on its website, where the streams section will indicate either restart or zero gas. Sign up now for FREE unlimited access to Reuters.com Register Nord Stream 1 has for the past two years resumed natural gas deliveries on time after the maintenance carried out every summer. This July, the delay in servicing a turbine in Canada and Gazprom’s declaration of force majeure to European customers, meaning it cannot guarantee delivery due to exceptional circumstances, has raised concerns of a prolonged shutdown. read more Two sources familiar with Gazprom’s plans told Reuters on Tuesday that flows are likely to resume at pre-maintenance levels of 40 percent of the pipeline’s capacity. read more The head of Germany’s energy regulator said on Wednesday that he expects the pipeline to restart at about 30 percent of capacity based on nominations or requests for gas at Lubmin, where Nord Stream 1 reaches Germany. read more There is still time to change these nominations before maintenance is scheduled to end. Although better than no restart, reduced capacity gas flows would still disrupt Europe’s storage plans and worsen the gas crisis that has prompted emergency measures by governments and painfully high bills for consumers.
TURBINE REFRESH POINT
As the West accuses Moscow of using its energy resources as a weapon, some European governments, such as Germany, have said any delay to the turbine could give Russia a pretext to extend maintenance. Canada said it had issued a permit for the return of the turbine, but it is not known when it will reach the Nord Stream pipeline. Russian President Vladimir Putin also said it was unclear in what condition the turbine would be returned after repairs to Canada, adding to the uncertainty over restarting the pipeline. read more Russia insists it is a reliable supplier and rejects Western accusations that it is using energy to blackmail Europe. He also accuses the West of supporting Ukraine as waging an economic war against Moscow. Russian gas giant Gazprom ( GAZP.MM ) said the turbine is essential to the safety of Nord Stream 1 and said it had not received documentation from Siemens Energy ( ENR1n.DE ), which maintained the turbine, that it must install it again. read more Gazprom did not comment on its declaration of force majeure, which dates back to June 14, when Russia cut gas flows to 40 percent of capacity, citing the missing turbine. read more The traders, speaking on condition of anonymity, saw the statement as an attempt to protect Gazprom from any legal action for breaching the contract. Along with analysts and governments, they also braced for months of tension and possibly varying gas flows. “With European leaders determined to increase sanctions on the Kremlin, the likelihood has increased that the Russian government will announce the next step to further cut gas flows to Europe in response,” said Hans van Cleef, senior economist energy to ABN. Amro said. Other analysts also expect further cuts in flows in the coming months, but note that Russia needs income as much as Europe needs natural gas. “We believe the most likely scenario is that Nord Stream flows will restart and return to capacity once Gazprom receives the gas turbine from Siemens, but risks remain for further declines in the coming weeks or months,” analysts at the investment firm said in a note. Jefferies Bank. . “We believe that Russia’s objective is to prevent Europe from building gas reserves before winter, to keep gas prices high, to maximize economic damage and to maintain leverage. The latter is not achieved if volumes are reduced to zero,” they added. According to the Finland-based research organization Center for Research and Clean Air, Russia earned 24 billion euros ($24.6 billion) in natural gas pipeline revenues in the first 100 days of the war in Ukraine (February 24-June 3). And for Europe, the economic stakes are high. About 32% of gas consumption in Europe comes from Russia, 90% of which is via pipelines. Russia is also heavily dependent on the European market, with 82% of its pipeline gas exports going to the continent, Barclays analysts said. The European Commission said a complete cut-off of Russian gas supplies to Europe, if combined with a cold winter, could reduce average EU GDP by up to 1.5% if countries do not prepare in advance. European Commission President Ursula von der Leyen said on Wednesday that a complete cut-off was “a possible scenario” as the EU executive proposed a voluntary target for member states to cut natural gas use by 15% by March. ($1 = 0.9754 euros) Sign up now for FREE unlimited access to Reuters.com Register Report by Nina Chestney. additional reporting by Kate Abnett in Brussels, Marwa Rashad in London and Christoph Steitz in Frankfurt and Reuters offices. Edited by Veronica Brown and Barbara Lewis Our Standards: The Thomson Reuters Trust Principles.
