Russia has drastically reduced gas supplies to Europe in recent weeks.
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Russia’s state-owned energy giant Gazprom on Wednesday halted gas flows to Europe via a major pipeline, citing maintenance works on its only remaining compressor.
It is expected that gas flows via Nord Stream 1, which runs from Russia to Germany via the Baltic Sea, will be suspended from Aug. 31 through to Sept. 3.
The shutdown had been announced in advance, with Gazprom saying in mid-August that gas flows would be suspended for a three-day period for maintenance works.
Gazprom previously said that gas transmission would resume at a rate of 33 million cubic meters per day when the maintenance work is completed “provided that no malfunctions are identified.”
The temporary halt to supplies reflects a deepening gas dispute between Russia and the European Union and underscores both the risk of a recession and a winter shortage.
Russia has drastically reduced gas supplies to Europe in recent weeks, with flows via the Nord Stream 1 pipeline operating at just 20% of the agreed-upon volume.
Moscow has previously blamed faulty and delayed equipment for the sharp drop in gas supplies.
Germany, however, considers the supply cut to be a political maneuver designed to sow uncertainty across the bloc and boost energy prices amid the Kremlin’s onslaught against Ukraine.
European policymakers are currently racing to secure gas supplies in underground facilities in order to have enough fuel to keep homes warm during the colder months.
These gas injections have been developing faster than expected.
‘Full bunkering mode’
“Europe is in full bunkering mode and taking no chances with Russian supplies heading into the winter,” Wei Xiong, senior analyst at energy consultancy Rystad Energy, said in a research note.
The latest data compiled by industry group Gas Infrastructure Europe shows that the EU’s overall storage levels are at an average of over 80% full, while Germany’s underground storage is nearly 84% full.
Rystad’s Xiong said gas storage in Europe was only 66% full in the same period in 2021, “although the cost would have been significantly lower.”
Germany, until recently, bought more than half of its gas from Russia. And the government is now battling to shore up winter gas supplies amid fears Moscow could soon turn off the taps completely.
It had planned for gas storage levels to reach 75% by Sept. 1, with the next federally mandated targets set at 85% by Oct. 1 and 95% by Nov. 1.
“The ahead-of-schedule injections are providing some relief on the concerns about Russian supply disruptions,” Xiong said.
“The risk to European winter supplies remains, however – given low transmissions from Russia and intensified maintenance of Nord Stream 1, storage levels could be vulnerable.”
Source: CNBC
