Russia’s Gazprom tightens pressure on gas flows to Europe

  • This content was produced in Russia, where the law restricts coverage of Russian military operations in Ukraine.

MOSCOW (Reuters) – Russia increased pressure on gas in Europe on Monday in the name of Gazprom (GAZP.MM) He said that supplies via Nord Stream 1 pipeline to Germany would be reduced to just 20% of its capacity.

Gazprom said flows will drop to 33 million cubic meters per day from 0400 GMT on Wednesday – a halving of the current already low level – because it needs to decommission a Siemens gas turbine at a compressor plant on the instructions of an industry watchdog. . .

Germany said it saw no technical reason for the latest reduction, which comes as Russia and the West trade economic blows in response to what Moscow calls its own military operation in Ukraine.

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The Dutch gas contract for the month of the nearest maturity, the European standard, closed 9.95% higher after news of the latest hit by Nord Stream 1. The pipeline, which has a capacity of 55 billion cubic meters per year, is the largest link of Russian gas to Europe.

The European Union has repeatedly accused Russia of resorting to energy blackmail, while the Kremlin says the shortcomings stem from maintenance problems and the impact of Western sanctions.

Politicians in Europe said Russia may cut off the flow of gas this winter, which could push Germany into recession and lead to higher prices for consumers already struggling with rising food and energy prices.

Germany was forced last week to announce a $15 billion rescue plan for Uniper (UN01.DE), its largest company that imports gas from Russia. Read more

Putin’s warning

The latest cut was predicted by President Vladimir Putin, and this month the West warned that continued sanctions could lead to a catastrophic rise in energy prices for consumers around the world. Read more

Russia had already reduced flows through Nord Stream from 1 to 40% of capacity in June, citing delays in returning turbines served by Siemens Energy. (ENR1n.DE) In Canada – an explanation that Germany rejected as spurious.

A view shows pipes at the landing facilities on the “Nord Stream 1” gas pipeline in Lubmen, Germany, July 21, 2022. REUTERS/Angrett Heels/File Photo

Nord Stream 1 then shut down completely for 10 days of annual maintenance this month, restarted it last Thursday and is still at 40% of normal levels.

Maintenance of this first turbine is still in dispute as it makes its way back to Russia through a tangle of paperwork and conflicting statements.

Gazprom said on Monday it had received documents from Siemens Energy (ENR1n.DE) and Canada but they “do not remove pre-identified risks and raise additional questions”.

She added that there were still questions about EU and UK sanctions, “their resolution of which is important for the delivery of the engine to Russia and the urgent repair of other gas turbine engines for the Portovaya compressor station.”

Siemens Energy said the transfer of the serviced turbine to Russia could begin immediately, and the ball was in Gazprom’s court.

She added that “the German authorities provided Siemens Energy with all the necessary documents to export turbines to Russia at the beginning of last week. Gazprom is aware of this.”

“But what is missing are customs documents for import into Russia. Gazprom, as a customer, is required to submit these documents.”

The German company said it did not see a link between the turbine issue and the gas cuts implemented or announced by Gazprom. Gazprom did not immediately respond to a request for comment.

The Kremlin said earlier that Moscow was not interested in a complete halt to Russian gas supplies to Europe, which is struggling to fill its underground storage before peak winter demand.

The disruption has increased the risks of gas rationing on the continent, with the European Union proposing to member states last week to cut gas use by 15% between August and March compared to the same period in previous years.

Russia is the second largest oil exporter in the world after Saudi Arabia and the largest exporter of natural gas in the world. Europe imports about 40% of its gas and 30% of its oil from Russia.

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Reuters reports in Moscow. Additional reporting by Nina Chestney, Marwa Awad and Christoph Stitz. Written by Mark Trevelyan and Editing by Guy Faulconbridge, Barbara Lewis and Thomas Janowski

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