Already struggling to tame rising gas prices, European governments expected the Nord Stream 1 pipeline to resume flows after a brief maintenance run this week. But Russia abruptly canceled the restart, citing an oil leak in a turbine. Europe has accused Russia of rigging energy supplies in what Moscow has called an “economic war” with the West over the fallout from Russia’s invasion of Ukraine. Moscow blames Western sanctions and technical issues for supply disruptions. The latest shutdown of Nord Stream, which Russia says will last as long as repairs are needed, added to fears of winter gas shortages that could help push major economies into recession and cut energy. The discovery of the oil spill on Friday coincided with the Group of Seven countries moving ahead with plans to impose a price gap on Russian oil, aimed at shrinking Russian President Vladimir Putin’s resources to fight the war in Ukraine. Natural gas shortages also prompted European Union member Sweden on Saturday to unveil a financial support package for energy companies.
“Serious risk of disruption”
“If we do not act, there is a serious risk of disruptions in the financial system, which in the worst case could lead to an economic crisis,” said Swedish Prime Minister Magdalena Andersson. “Putin wants to create division, but our message is clear: You will not succeed,” he said. Gazprom said Siemens Energy was prepared to carry out repairs to the pipeline but that there was nowhere available to carry out the work, a suggestion Siemens Energy refused, saying it had not been asked to do the work. Siemens Energy also said the sanctions do not prohibit maintenance. Before the latest round of maintenance, Gazprom had already reduced flows to just 20 percent of the pipeline’s capacity. “Siemens is participating in the repair work according to the current contract, identifying malfunctions … and is ready to fix the oil leaks. Only there is nowhere to do the repair,” Gazprom said in a statement on its Telegram channel on Saturday .
Other turbines available: Siemens
Siemens Energy said it had not been commissioned to carry out the work but was available, adding that the leak reported by Gazprom did not normally affect the operation of a turbine and could be sealed on site. “Regardless, we have already pointed out several times that there are several additional turbines available at the Portovaya compressor station for the operation of Nord Stream 1,” said a company representative. Flows through Nord Stream 1 were due to resume early Saturday morning. However, hours before gas pumping began, Gazprom released a photo on Friday of an oil leak on a piece of Nord Stream 1 equipment. Siemens Energy, which supplies and maintains equipment at the Nord Stream 1 compressor station in Portovaya, said on Friday that the leak was not a technical reason to stop the gas flow. “Global gas prices will likely rise strongly on Monday as markets adjust to this latest #Gazprom development,” Tom Marzec-Manser, head of gas analysis at ICIS, said on Twitter. “Closing #NordStream1 further reduces overall Russian pipeline flows and will make it even more difficult to balance supply and demand this winter.” Asked about the disruption on Saturday, Economy Commissioner Paolo Gentiloni said the European Union expects Russia to respect the energy contracts it has agreed, but is ready to rise to the challenge if Moscow does not. Germany’s grid regulator said the country’s gas supply is currently guaranteed, but the situation is tense and further deterioration cannot be ruled out. Wholesale natural gas prices have soared more than 400 percent since August 2021, squeezing households already reeling from a cost-of-living crisis and forcing some energy-intensive industries, such as fertilizer and aluminum makers, to cut production. The European Commission said a complete cut-off of Russian gas supplies to Europe, if combined with a cold winter, could reduce average EU GDP by up to 1.5% if countries do not prepare in advance.
