Putin cut off gas supplies to Europe via the Nord Stream pipeline, just days after resuming flows. This is a sign of Europe’s growing energy crisis.
Gazprom will reduce flows through the link by about 20% starting Wednesday at 7 a.m. Moscow time.
After 10 days of planned maintenance, flows were reopened through the pipeline at around 40pc capacity. Since Russia cut supplies last month, they have been around that level for the past 10 days.
This follows a Kremlin warning that supplies could drop further if there is a dispute over equipment.
Gazprom stated that another turbine was due for maintenance and would be removed from service. However, a turbine that was stuck in Canada because of sanctions has not been returned.
This move will likely to further plunge Europe into an energy crisis. It will also fuel fears about rationing this winter.
The announcement led to a 10% increase in gas prices for European benchmarks.
Gazprom stated that flows will fall to 33 million cubic meters per day starting Wednesday at 0400 GMT. This is because Gazprom had to stop the operation of a Siemens turbine at a compressor station, following instructions from an industry watchdog.
Germany stated that it did not see any technical reason for the reduction. This is as Russia and the West trade economic blows in retaliation for Moscow’s special military operation in Ukraine.
Nord Stream 1 has a capacity to transport 55 billion cubic meters of Russian gas per year. It is the largest Russian gas link to Europe. After the news, the European benchmark for gas contracts, the Dutch front-month contract, rose 9.2%.
While the European Union has accused Russia of energy blackmailing, the Kremlin claims that the disruption was caused by maintenance issues as well as the effects of Western sanctions.
Europe’s politicians have suggested that Russia could cut gas flow this winter. This would put Germany in recession and cause a spike in prices for consumers already struggling to pay higher energy and food prices.
Last week, Germany was forced to announce a $15 billion bailout for Uniper, the largest Russian gas importer.
PUTIN WARNING
This month, President Vladimir Putin warned that the West could face a series of sanctions that will lead to catastrophic rises in energy prices for consumers all over the globe.
He hinted at the latest cut last week in comments about the Nord Stream 1 compressor, saying: “There are only two machines that work there.” They pump 60 million cubic meters per day. One is returned if one is not returned. The other is 30 million cubic meters.
Russia is the second-largest oil exporter in the world, after Saudi Arabia. It also exports the most natural gas. Europe imports around 40% of its natural gas from Russia, and 30% of its oil directly from Russia.
Gazprom’s gas flow via Nord Stream 1 resumed last week following a 10-day maintenance period. However, only 40% of the pipeline’s capacities were available – Russia had reduced volumes to this level in June due to the late return of a turbine being maintained in Canada.
European politicians have questioned this explanation. Germany claimed that the turbine was not intended to be used until September.
Gazprom stated Monday that it had received documents from Siemens Energy Canada and Canada regarding the first turbine but that there were still issues.
“Gazprom examined the documents but must acknowledge that they don’t remove previously identified risks or raise additional questions,” it stated in a statement.
“Additionally there are still open issues from Gazprom concerning the EU and UK sanctions. The resolution of these questions is crucial for the delivery engine to Russia as well as the urgent overhaul of other gas turbine motors for the Portovaya compressor stations.
Moscow stated earlier that it was not interested in stopping Russian gas supplies to Europe. Europe is currently rushing to fill underground storage tanks before winter’s peak demand.
Gazprom was not responsible for the storage risk, and it reiterated its position that Europeans are now suffering from the sanctions they imposed on Russia.
