Nord Stream 1 gas supply cut aims to sow uncertainty, warns Germany

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Pipes from the landing facilities of the ‘Nord Stream 1’ gas pipeline are pictured in Lubmin, Germany March 8, 2022. REUTERS/Hannibal Hanschke

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BERLIN, June 15 (Reuters) – Russian group Gazprom (GAZP.MM) announced on Wednesday a further reduction in the amount of gas it can pump through the Nord Stream 1 gas pipeline to Europe, a move which the government said German Economy Minister, aims to sow uncertainty and drive up fuel prices.

The second reduction in supply capacity in as many days means that Nord Stream 1 will operate at just 40% capacity. Gazprom initially blamed delays in getting equipment from Siemens Energy (ENR1n.DE) undergoing maintenance in Canada, which the German energy regulator said did not explain the reduction.

Uniper (UN01.DE), Germany‘s largest importer of Russian gas, said deliveries from Russia were down a quarter from agreed volumes.

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British and Dutch wholesale gas prices rose after Gazprom’s warning, the latest example of how the energy market has become central to the economic war between Moscow and the West since the invasion of the Ukraine by Russia on February 24.

Gazprom said on Wednesday it was further reducing the use of Siemens-made equipment at the Portovaya compressor station near St. Petersburg.

“The argument of the Russian side is just a pretext. It is obviously a strategy to destabilize and drive up prices,” German Economy Minister Robert Habeck said in a statement following the latest reduction, which will limit Nord Stream 1 flows to 67 million cubic meters per day.

Gazprom did not immediately respond to a request for comment.

The Dutch first-month contract rose 16.7 euros to 113.60 euros per megawatt hour (MWh) at 3:18 p.m. GMT, its highest level since mid-May. The daily contract is up by 17.07 euros to 107.50 euros/MWh.

Flows through the Nord Stream 1 pipeline remained fairly steady at around 45 million kilowatt hours per hour until 5:00 p.m. GMT, according to data from the Nord Stream website.

Website data showed a sharp drop in nominations to around 29.6 million kilowatt hours per hour as of 2100 GMT, in line with the pipeline operating at 40% capacity.

UNIPER DROP DELIVERIES

Uniper said its supplies from Russia were 25% below nominated volumes. He was able to obtain the missing volumes from other sources and was in contact with German authorities, he said.

Gazprom’s gas flows to Italy were down around 15% on Wednesday from the previous day, ENI said. Read more .

Gazprom demanded that its buyers in Europe pay for the gas in rubles.

While Germany’s Uniper and RWE paid under a new scheme proposed by Moscow to ensure a continuous supply of essential fuel to Europe’s biggest economy, Gazprom cut supplies to some others, including Denmark’s Orsted and Shell Energy .

The latest decision highlights the challenge facing Germany, which depends on Russia for most of its natural gas, to find suitable alternatives to an energy supplier that Europe’s largest economy needs. but no longer wants.

It should also make it much harder to fill Germany’s gas storage facilities, which are currently 55.6% full but need to be 80% by October and 90% by November to get the country through the winter. if Russia stops supplies.

“We can currently buy the necessary quantities on the market, but at higher prices,” said Habeck, adding that although the supply was secure, saving energy was on the agenda.

“Of course we will take action at state level if necessary,” he said, a day after Germany decided to place Gazprom Germania, from which Russia withdrew in April, under long-term administration and to support it with 10 billion euros (loan of 10.4 billion dollars).

($1 = 0.9606 euros)

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Additional reporting by Victoria Waldersee; Written by Madeline Chambers and Christoph Steitz; Editing by Angus MacSwan, Mark Porter, Elaine Hardcastle

Our standards: The Thomson Reuters Trust Principles.

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