The European Union (EU) told member states on Wednesday to cut gas consumption by 15 percent until March as an emergency step after President Vladimir Putin warned that Russian supplies sent to Europe via the largest pipeline could be further reduced and even stop.
Deliveries through the Nord Stream 1 pipeline, which accounts for more than a third of Russia’s gas exports to the EU, will resume on Thursday after a 10-day interruption for annual maintenance.
But supplies through that route had already been cut before the maintenance shutdown in the sanctioned parts dispute, and may now be cut further, while flows through other routes, such as Ukraine, have also declined since Russia invaded its neighbor in February.
The disruptions have hampered Europe’s efforts to replenish gas storage before the winter, raising the risk of rationing and another blow to fragile economic growth if Moscow further restricts flows in retaliation for Western sanctions over the war in Ukraine.
The European Commission has proposed a voluntary target for all EU countries to reduce gas consumption 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 therefore, whether it’s a partial, major cut-off of Russian gas or a total cut-off of Russian gas, Europe has to be ready,” the president of the European Commission, Ursula von der Leyen, said.
The Commission’s proposal would allow Brussels to make the target mandatory in the event of a supply emergency, if the EU were to declare a substantial risk of serious gas shortages.
The move, which needs EU countries’ support, will be discussed on Friday for ministers to approve on July 26.
“We think a complete disruption is likely,” said an EU official. “If we wait, it gets more expensive and means we’re going to dance to the Russian tunes.”
EU countries are trying to ensure that storage facilities are 80 percent full by November 1, from about 65 percent now. https://tmsnrt.rs/3RMqnZg
Will flows resume?
European politicians say Russia is using technical problems as a pretext to cut deliveries. The Kremlin says Russia is a reliable energy supplier and blames sanctions for reduced flows.
Two Russian sources familiar with export plans said flows through Nord Stream 1 were expected to restart on Thursday, but below the capacity of 160 million cubic meters (mcm) per day.
Kremlin-controlled Gazprom cut gas exports through the route to 40% capacity in June, blaming delays in the return of a turbine that Siemens Energy maintained in Canada.
That turbine, which had become mired in sanctions, was said to be on its way back this week, although Gazprom said on Wednesday it had not received documentation to reinstall it and said the return of the turbine and maintenance of other equipment was needed to ensure the maintain pipeline. walk safely.
Putin said there could be a further cut in supplies or even a complete shutdown of flows through the pipeline that runs under the Baltic Sea to Germany, which relies heavily on Russian fuel.
He said equipment was being returned from Canada, but said the quality of the equipment returned and other parameters meant that the pipeline could still lead to a complete shutdown in the future.
“Maybe… at some point they’ll turn it off, and that’s it, and Nord Stream 1 will stop, because they came from there, from Canada,” he said in television commentary.
Since the outbreak of the crisis in Ukraine, gas prices in volatile trade have exploded. The gas contract for the first month climbed above 160 euros per megawatt hour (MWh) on Wednesday, 360 percent more than a year ago, but below the March peak of 335 euros.
The price hike has put pressure on utilities, leading to bankruptcies. In Germany, the government plans to inject billions of euros into the country’s largest buyer of Russian gas, Uniper.
Siemens Energy said turbine maintenance for the Nord Stream 1 would normally be a routine matter. It said it would continue to maintain equipment under sanctions if possible and where necessary, and would be up and running as soon as possible.
In previous comments, Putin said that one of the five gas pump units operated by Siemens Energy at Nord Stream 1 was out of service due to a “crumbling inner liner” and another would be sent for service on July 26.
Putin said Gazprom, which has a monopoly on Russian gas exports by pipeline, is not responsible for reducing gas throughput through a network of pipelines to Europe.
He accused Kiev of closing one route through Ukraine, although Ukrainian authorities attribute the closure to the Russian invasion.
In the east, Gazprom said on Wednesday that Russian gas shipments bound for China hit a new daily record. Moscow has expanded its capacity to supply China even as supplies to Europe dwindle, even though Russia’s far east is not connected to the European supply system.
European countries, meanwhile, are chasing alternative supplies, although the global gas market was stretched even before the crisis in Ukraine as demand for the fuel recovered from the pandemic-induced downturn.
Those efforts include seeking more gas from pipelined suppliers to Europe, such as Algeria, and building or expanding more liquefied natural gas (LNG) terminals to accommodate shipments from much further afield, such as the United States. receive.
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