Here’s what’s at stake if Russia doesn’t get a key European gas pipeline back up and running this week Investors will soon find out whether the world’s largest subsea pipeline, all 759 miles of it sitting under the Baltic Sea, will save Europe from a potentially devastating winter.
The so-called Nord Stream 1 pipeline, which normally transmits 55 billion cubic meters of natural gas a year from Russia to Germany, has been under planned repairs since July 11, and scheduled to be back up and running by Thursday.
Maybe.
The European Union has been scrambling to prepare countries for a cut off of Russian gas which could crush more dependent countries such as Germany which gets 35% of its gas from the pipeline. The EU governing body has been busy lowering expectations for a full restart on Thursday.
Faith Birol, the executive director of the International Energy Agency, echoed that sentiment on Monday. “In my view, it is much better to take steps now to prepare for winter than to leave the well-being of hundreds of millions of people and European economies at the mercy of the weather or, even worse, to give unnecessary extra leverage to President Vladimir Putin of Russia,” said Birol.
Pipeline deadline
Russian energy giant Gazprom RU:GAZP cut gas deliveries to Europe by 60% in June, citing technical problems from a turbine being repaired in Canada that was delayed by sanctions but has now reportedly been returned. In a move that alarmed some, Gazprom on Monday declared force majeure, meaning it claimed unforeseeable circumstances were preventing it from fulfilling its contract to deliver gas to some European customers.
The EU and Germany have accused Russia of using the pipeline and its energy trove as a tool to retaliate over sanctions imposed by the E.U. stemming from its late February invasion of Ukraine.
And while efforts are being made to stockpile gas ahead of the winter, southern Europe is also suffering an intense heat wave that is likely to push prices higher, say some. U.K. natural-gas prices surged Tuesday amid record temperatures.
“We think Putin is indeed weaponizing natural gas. We think Russia — which has already reduced supply on other pipelines—won’t restore full and regular flow through the Nord Stream 1 pipeline after July 21, though our best guess is that some limited and intermittent supply will resume,” said an Evercore team led by strategist Krishna Guha, in a July 11 note.
Guha says a small supply for Europe will probably partly balance Russia’s interests by weakening Europe sanctions and maximizing the region’s vulnerability to a cut-off headed into the winter when Moscow may push for a settlement on its own terms. .............
https://www.marketwatch.com/story/heres-whats-at-stake-if-russia-doesnt-get-a-key-european-gas-pipeline-back-up-and-running-this-week-11658238822?mod=home-page
