RUSSIA/GERMANY: The Nord Stream 1 pipeline would be permanently shut down after the company claimed to have discovered an oil leak in one of its turbines. For the previous three days, the pipeline has been closed for what Gazprom has referred to as maintenance work.
The announcement comes as concerns about European households’ ability to pay for heating this winter are mounting. Since Russia invaded Ukraine, energy prices have increased sharply, and dwindling supplies could cause prices to rise even more.
To limit Moscow’s capacity to finance the conflict, Europe is making an effort to wean itself from Russian energy, but the change may not happen soon enough. Charles Michel, the president of the EU Council, said the Russian action was “sadly no surprise.”
“The EU’s determination will not be altered by the use of gas as a weapon. Our progress toward energy independence will be accelerated. Protecting our countrymen and promoting Ukraine’s freedom are our obligations,” Michel tweeted.
Moscow denies exploiting the availability of energy as a tool for economic warfare in retribution for Western sanctions put in place after Russia’s incursion. The sanctions have been cited as the reason routine maintenance on Nord Stream 1 has been delayed, but the EU claims this is only an excuse.
The Bundesnetzagentur, Germany’s network regulator, claimed that the nation was now better prepared for the interruption of Russian gas supply, although it urged individuals and businesses to reduce use.
By introducing a price cap, they are allowing countries who agree to the policy to only buy Russian oil and petroleum products that are shipped by sea and are being sold at or below the price cap.
Russia, however, asserts that it would not export to nations that don’t adhere to the restriction. The gas pipeline, which runs from the coast of Russia near St. Petersburg to northeastern Germany, has a daily capacity of 170 million cubic metres. It is owned and run by Nord Stream AG, which has Gazprom as its largest shareholder.
Before Russia invaded Ukraine, Germany had also supported the construction of a rival pipeline, known as Nord Stream 2. However, the project was abandoned as a result.
The malfunction, according to Gazprom, was found at the Portovaya compressor station during an inspection that included workers from Siemens, the German company that looks after the turbine.
It claimed that only specialised workshops, which had been constrained by Western sanctions, could repair oil leaks in major engines.
Siemens, however, stated, “Such leaks can be fixed on-site and typically do not interfere with a turbine’s functioning. Within the parameters of maintenance work, it is a standard procedure.”
The Nord Stream 1 pipeline has been shut down numerous times since the invasion. In July, Gazprom cut off supplies for ten days while claiming, “a maintenance pause.” Ten days later, it started up again, but much more slowly.
However, Europe thinks President Putin is weaponizing gas supplies by purposefully reducing pipeline flows to drive up prices and test the fortitude of Russia’s detractors.
As a result, as we’ve previously seen, energy costs are skyrocketing, with consumers and companies bearing the brunt of the cost. It’s remarkable how Gazprom timed its action. It coincides with the G7’s announcement of actions to limit the price of Russia’s oil exports.
However, it also comes just after Germany, which depends heavily on Russian gas, disclosed that its winter reserve was filling up more quickly than anticipated.
A cynic may claim that this was the last chance to tighten the screw so that the damage would be as great as possible during the colder months.
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