Deliveries of Russian natural gas through a key pipeline in Europe will fall by about 40% this year, state-controlled energy giant Gazprom said on Tuesday after Canadian war sanctions on Ukraine prevented to German partner Siemens Energy deliver revised equipment.
The German utility network agency said it did not see the gas supply in jeopardy and that the reduction in flows through the Nord Stream 1 pipeline under the Baltic Sea was in line with commercial and the gas cut previously announced by Russia in Denmark and the Netherlands, reported the German news agency dpa. . The Federal Network Agency said it was monitoring the situation.
Cash gas prices rose in Europe, a sign of nervousness over the possible after-effects of the war on Russia’s gas supply, which feeds industry and generates electricity on the continent.
The European Union has outlined plans to reduce dependence on Russian gas by two-thirds by the end of the year. Economists say a full cut would be a severe blow to the economy, consumers and gas-intensive industries.
High energy prices are already contributing to record inflation of 8.1% in the 19 countries that use the euro.
Gas demand has fallen after the end of the winter heating season, but European utilities are struggling to replenish storage before next winter with high prices and uncertain supplies.
“Gas supplies to the Nord Stream pipeline can currently be provided for up to 100 million cubic meters per day (compared to) the projected volume of 167 million cubic meters per day,” Gazprom said in a statement. .
It did not provide a timetable for the expected fall in gas flows.
Siemens Energy said a gas turbine that powers a gas pipeline compression station had been in service for more than 10 years and had been taken to Montreal for a scheduled overhaul. But due to sanctions imposed by Canada, the company has been unable to return the equipment to the customer, Gazprom.
“In this context, we informed the Canadian and German governments and we are working on a sustainable solution,” Siemens Energy said in a statement.
The story goes on
Also on Tuesday, the German government said it was making an emergency loan to a former Gazprom subsidiary to avoid bankruptcy and safeguard the country’s gas supply.
Germany put a government agency in charge of Gazprom Germania in April, saying the move was temporary to put “order to conditions” on the company after the Kremlin-controlled parent company severed ties with its filial.
Gazprom Germania, which plays a central role in the trade, transport and storage of natural gas in Germany and neighboring countries, later received sanctions from Russia in a move in favor of Western sanctions on Ukraine.
Dpa quoted unnamed government officials as saying the loan would be between 9,000 and 10 billion euros (between $ 9.4 billion and $ 10.4 billion).
The government said the loan would “avoid bankruptcy and avoid a cascading effect on the market”.
“The money will be used to boost liquidity and buy replacement gas,” he said in a statement.
The government added that Gazprom Germany would also be renamed Securing Energy for Europe GmbH, or SEFE, as a “clear signal to the market that the aim of the measures taken is to ensure the supply of energy to Germany and Europe.” .