The Nord Stream 1 pipeline, through which Russian gas has actually been streaming to Germany given that 2011, will be closed down for around 10 days for set up upkeep work.
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Europe is bracing for a prolonged shutdown of Russian gas products as upkeep work starts on the Nord Stream 1 pipeline that brings gas to Germany through the Baltic Sea.
Operator Nord Stream AG verified the work, which is set up to range from Monday through to July 21, got underway as prepared Monday early morning. Russian gas streams through the pipeline are anticipated to drop to absolutely no later on in the day.
The Nord Stream 1 pipeline is Europe’s single greatest piece of gas import facilities, bring around 55 billion cubic meters of the fuel annually from Russia to Germany.
Europe fears the suspension of shipments might be extended beyond the 10- day timeline, hindering the area’s winter season supply preparations and worsening a gas crisis that has actually triggered increasing energy costs for homes and emergency situation steps from policymakers.
It comes as European federal governments rush to fill underground storage with gas products to supply homes with sufficient fuel to keep the lights on and houses warm throughout winter season.
The EU, which gets approximately 40% of its gas through Russian pipelines, is attempting to quickly decrease its dependence on Russian hydrocarbons in reaction to President Vladimir Putin’s monthslong assault in Ukraine.
Klaus Mueller, the head of Germany’s energy regulator, thinks the Kremlin might continue to throttle Europe’s energy products beyond the set up end of the upkeep work.
“We cannot rule out the possibility that gas transport will not be resumed afterwards for political reasons,” Mueller informed CNBC recently.
Energy experts concur that the danger of a short-lived disturbance is high, especially as Russian gas circulations have actually currently visited about 60% in current months.
Russia’s state-backed energy giant Gazprom has actually pointed out the postponed return of devices serviced by Germany’s Siemens Energy in Canada for its decreased circulations.
Canada stated over the weekend that it would return a fixed gas turbine back to Germany for usage in the Nord Stream 1 pipeline, while likewise broadening the sanctions versus Russia’s energy sector.
Russia stated recently that it would increase gas products to Europe if the turbine being serviced in Canada was returned. Kremlin representative Dmitry Peskov likewise dismissed claims that Russia was utilizing oil and gas to put in political pressure over Europe, Reuters reported.
‘Maximum financial warfare’
Analysts at political danger consultancy Eurasia Group stated that if Putin managed an overall cutoff of gas products beyond the set up end of upkeep deals with the Nord Stream 1 pipeline, Germany would likely be required to relocate to level 3 of its three-stage emergency situation gas strategy.
At this level, Germany’s regulator, Bundesnetzagentur, would require to choose how to disperse gas products across the country.
Henning Gloystein, director of energy, environment and resources at Eurasia Group, informed CNBC that such a relocation would represent a “maximum economic warfare” situation.
“Germany has become a hotspot for the entire EU,” Gloystein stated. “Germany has Europe’s biggest population, it’s the biggest economy, it’s the biggest gas consumer, it’s the biggest single importer of Russian gas, and it has got nine land borders. So, whatever happens in Germany spills into the rest of Europe.”
Russia has actually cut off gas products to a number of European nations that declined to adhere to Putin’s gas-for-rubles payment need.
“That is actually why though … we think Russia will return a little bit,” Gloystein stated. “They want a little bit of a bargaining chip in case the Europeans tighten the sanctions further so then the Russians can retaliate with that.”
German Economy Minister Robert Habeck and Chancellor Olaf Scholz are visualized throughout a weekly cabinet conference on July 1, 2022.
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A representative for Germany’s Federal Ministry of Economics and Climate Action informed CNBC recently that the federal government was carefully keeping an eye on the gas market circumstance ahead of the set up upkeep work.
“Security of supply is currently still guaranteed, but the situation is serious,” the representative stated.
“At present, the quantities can be procured on the market, albeit at high prices. Storage is also continuing at present. We are in close exchange on this with the traders, who are preparing for this date,” they included.
