- Nord Stream 1 pipeline out of action for maintenance
- The pipeline is due to resume pumping on Thursday
- The EU says states must act now to reduce gas consumption
- Germany, others have rationing plans and others
BRUSSELS / LONDON, July 20 (Reuters) – The European Union on Wednesday told member states to reduce gas consumption by 15% by March as part of an emergency plan after President Vladimir Putin warned that Russian supplies shipped to Europe via the larger pipeline could be further reduced.
Deliveries through the Nord Stream 1 pipeline, which accounts for more than a third of Russian gas exports to the EU, will resume on Thursday after a 10-day shutdown for annual maintenance.
But supplies for this route had been reduced even before the interruption of maintenance in the dispute of the sanctioned parties, and can now be cut even further, while flows for other routes, such as Ukraine, have also decreased since Russia invaded its neighbor in February.
Register now for FREE and unlimited access to Reuters.com
Sign up
The disruptions have hampered Europe’s efforts to replenish gas stores before winter, increasing the risk of rationing and again fragile economic growth if Moscow further restricts flows in retaliation for Western war sanctions. in Ukraine.
The European Commission proposed a voluntary target for all EU states to reduce gas consumption by 15% from August to March, compared to their average consumption in the same period in 2016-2021.
“Russia is blackmailing us. Russia is using energy as a weapon. And so in any case, whether it is a partial and significant cut in Russian gas or a total cut in Russian gas, Europe must be prepared.” . This was stated by the President of the European Commission, Ursula von der Leyen.
The proposal would allow Brussels to make the target mandatory in a supply emergency, should the EU declare a substantial risk of severe gas shortages. Read more
The measure, which needs the support of EU states, will be discussed on Friday, so ministers can approve it at an emergency meeting on 26 July.
“We believe that a total disruption is likely and it is especially likely if we do not act and leave ourselves vulnerable,” an EU official said. “If we wait, it will be more expensive and will make us dance to the rhythm of Russia.”
EU states are trying to ensure that storage facilities are 80% full on November 1, from 65% now, according to data. https://tmsnrt.rs/3RMqnZg
European politicians say Russia is using technical problems as a pretext to reduce deliveries. The Kremlin says Russia remains a reliable energy supplier and has attributed the reduction in flows to sanctions.
Two Russian sources familiar with Russia’s export plans said flows through Nord Stream 1 were expected to resume in time on Thursday after they were stopped on July 11 for annual maintenance.
But they said it would be below its capacity of 160 million cubic meters (lcm) per day.
Gazprom (GAZP.MM), controlled by the Kremlin, reduced gas exports down the route to 40% of its capacity in June, blaming delays in the return of a turbine that Siemens Energy (ENR1n.DE) gave service in Canada.
MORE REDUCTIONS
This week it was reported that this turbine, which has been affected by the sanctions, was returning, although Gazprom said on Wednesday that it had not received the documentation to reinstall it and said it needed to return the turbine and the maintenance of other equipment to maintain the pipeline. running safely. Read more
Putin suggested that there could be a further reduction in supplies through the pipeline running under the Baltic Sea to Germany, Europe’s economic power that has largely depended on Russian fuel, which is adds to European supply concerns. Read more
Gas prices have skyrocketed in volatile trade since the Ukraine crisis erupted. The first month’s gas contract rose above 160 euros per megawatt hour (MWh) on Wednesday, 360% more than a year ago, but below its March high of 335 euros.
The price increase has compressed utility companies causing bankruptcies. In Germany, the government plans to inject billions of euros into the country’s largest Russian gas buyer, Uniper (UN01.DE). Read more
Putin said there were five gas pumping units, operated by Siemens Energy in Nord Stream 1 and one more unit was out of service due to the “sinking of the inner liner.”
“There are two machines that work there, they pump 60 million cubic meters a day … If you don’t return one, there will be one, which is 30 million cubic meters. Does Gazprom have anything to do with it?” He said.
Putin said one more of the gas pumping turbines was due for maintenance on July 26.
He also said that Gazprom, which has a monopoly on Russian gas exports by pipeline, was not to blame for the reduction in gas transit capacity through a pipeline network to Europe.
He blamed Kyiv for closing a route through Ukraine, although Ukrainian authorities attribute the halt to the invasion of Russia.
Siemens Energy said maintaining the turbines for Nord Stream 1 would normally be a regular affair. He said he would continue to keep teams under sanctions if possible and when necessary, and that he would work as fast as he could. Read more
In a pivot to the east, Gazprom said on Wednesday that the supply of Russian gas to China via its Power of Siberia gas pipeline reached a new daily record. Moscow has been expanding its capacity to supply China even when deliveries to Europe are declining, even though Russia’s Far East network is not connected to the European supply system.
Meanwhile, European nations have been pursuing alternative supplies, even as the world gas market stretched even before the Ukraine crisis, with fuel demand recovering from the pandemic-induced fall.
These efforts have included finding more gas from suppliers linked to Europe by pipelines, such as Algeria, and building or expanding liquefied natural gas (LNG) terminals to receive shipments from much further afield, such as the United States.
Register now for FREE and unlimited access to Reuters.com
Sign up
Reuters office reports; Written by Edmund Blair; Editing by Carmel Crimmins
Our standards: the principles of trust of Thomson Reuters.