Russia Scraps Gas Pipeline Reopening, Stoking European Fuel Fears

Pipes at the landfall facilities of the Nord Stream 1 gas pipeline are pictured in Lubmin, Germany, March 8, 2022. REUTERS/Hannibal Hanschke/

Russia has scrapped a Saturday deadline to resume flows via a major gas supply route to Germany, deepening Europe's difficulties in securing winter fuel, after saying it had found faults in the Nord Stream 1 pipeline during maintenance.

Nord Stream 1, which runs under the Baltic Sea, had been due to resume operating at 0100 GMT on Saturday after a three-day halt for maintenance.

But Gazprom, the state-controlled firm with a monopoly on Russian gas exports via pipeline, said on Friday it could not safely restart deliveries until it had fixed an oil leak found in a vital turbine. It did not give a new time frame.

Moscow has blamed sanctions, imposed by the West after Russia invaded Ukraine, for hampering routine operations and maintenance of Nord Stream 1. Brussels says this is a pretext and Russia is using gas as an economic weapon to retaliate.

"This is part of Russia's psychological war against us," tweeted Michael Roth, chair of the German parliamentary foreign affairs committee.

European Commission chief Ursula von der Leyen said earlier the EU should impose a price cap on Russian pipeline gas to foil what she said were President Vladimir Putin's attempts to manipulate the market.

Russia has denied previous allegations of using gas as an economic weapon or manipulating the gas market.

Wholesale gas prices have rocketed 400% since August 2021, hurting European industry and households, surging first due to recovering demand after the COVID-19 pandemic and then rising further because of the Ukraine crisis.

"We see that the electricity market does not work anymore because it is massively disrupted due to Putin's manipulations," Von der Leyen said, adding that a gas price cap on Russian pipeline supplies could be proposed at the European level.

Former Russian President Dmitry Medvedev said Moscow would turn off supplies to Europe if Brussels imposed such a cap.

"There will simply be no Russian gas in Europe," he wrote on the Telegram app in response to Von der Leyen.

Reduced deliveries via Nord Stream, alongside lower gas flows via Ukraine, another major route, have already left European states struggling to refill storage tanks for winter and prompted many to trigger emergency plans that could lead to energy rationing and stoking concerns about recession.

European Commission spokesman Eric Mamer wrote on Twitter that Gazprom had acted under "fallacious pretenses" to shut down Nord Stream 1. "It's also proof of Russia’s cynicism, as it prefers to flare gas instead of honoring contracts.”

'BETTER PREPARED'

Germany's network regulator said the country was more ready to cope with a disruption to Russian supplies, but households and companies had to cut energy consumption.

"It's good that Germany is now better prepared, but now it's down to each and everyone," Klaus Mueller, president of the Bundesnetzagentur, said on Twitter.

Kremlin spokesman Dmitry Peskov suggested earlier on Friday there could be more disruptions to deliveries via Nord Stream 1.

"It's not the fault of Gazprom that the resources are missing. Therefore, the reliability of the entire system is at risk," he said when asked if more outages could be expected.

Gazprom Chief Executive Alexei Miller said on Wednesday that sanctions meant Siemens Energy (ENR1n.DE), a pipeline equipment supplier, could not carry out regular maintenance.

Gazprom's statement on Friday cited Siemens saying repairs to the turbine after the discovery of the latest fault could only be done in "the conditions of a specialized workshop".

Siemens had no immediate comment. The company, which normally services Nord Stream 1 turbines, previously said it was not involved in recent maintenance but was ready to help if needed. It has said maintenance was excluded from sanctions.

EU governments have been preparing for the possibility that Russia stops deliveries completely after Gazprom first reduced flows in June and then again in July.

This week's maintenance halt was announced at short notice.

Germany, which has been particularly reliant on Russian supplies in the past, has been racing to install temporary liquefied natural gas (LNG) terminals to ship in gas before it builds permanent LNG facilities.

Germany's storage tanks are now nearly 85% full, on track to hit a Oct. 1 target earlier than planned. But Berlin says reaching its target of 95% by a Nov. 1 would still be tough unless companies and households used less fuel.

The EU as a whole has exceeded its target for storage to be 80% full by Oct. 1, ready for when heating usage picks up.

Some energy-intensive European companies, such as fertilizer and aluminum producers, have already cut back output due to sky-high power prices, while some domestic consumers have reined in usage to save on escalating household energy bills.


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