The German government has issued an appeal for citizens in the EU’s biggest economy to conserve energy as Russia cuts gas supplies to ever more European countries.
Germany’s deputy chancellor Robert Habeck said the situation was “serious” and that “now is the time” for companies and ordinary citizens to save energy and store gas. “Every kilowatt hour helps in this situation,” he said in a video appeal published on Twitter on Thursday.
Russia’s state-controlled gas exporter Gazprom has cut flows through the Nord Stream pipeline, which runs under the Baltic Sea to Germany, by 60 per cent in recent days, citing technical problems. But Germany has said the move is political.
Germany’s biggest power supply company RWE reported reduced gas flows on Thursday. Italy’s supplies were reduced by 15 per cent on Wednesday, and Italian energy company Eni said the shortfall had worsened on Thursday, while Slovakia reported a 30 per cent reduction in flows. Meanwhile, Austrian energy company OMV said it had been informed by Gazprom that delivery volumes would be cut.
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The Russian supply curbs came as the leaders of Germany, Italy and France visited Kyiv on Thursday in a show of support for Ukraine’s government almost four months into Russia’s invasion.
EU politicians have accused Russia of effectively weaponising its role as one of the world’s largest oil and gas producers, while European sanctions following the invasion have raised fears of further retaliatory cuts by Russia.
European gas prices, already running close to record levels, have soared more than 70 per cent this week in response to the latest restrictions in supply, reaching €146 per megawatt hour on Wednesday – a gain of almost 30 per cent on the day.
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Gazprom has blamed the reduction in gas flows to Germany on technical issues with the Nord Stream pipeline after pumping equipment, supplied by Germany’s Siemens Energy, was held up by Canadian sanctions following repairs at its factory in Montreal. Only about 67 million cubic metres of gas are now being pumped through Nord Stream – 40 per cent of its technical capacity.
Russia’s envoy to the EU, Vladimir Chizhov, warned on Thursday that further problems with the repairs could lead to a complete shutdown of the pipeline, with devastating consequences for Germany. “One should be asking Siemens why they had to send turbines to Canada for repairs,” Mr Chizhov told Ria Novosti news agency. “When all those turbines go to Canada for maintenance, it could stop. I think it will be a catastrophe for Germany.”
Gazprom’s chair Alexei Miller said on Thursday there was “no solution” to the problem with Nord Stream’s turbines as the Canadian plant is the only one that can repair the Siemens Energy turbines. Canada said it could not return the turbines because it was the only country that had introduced sanctions against Gazprom, he added.
Nearly all of its other turbines were close to requiring maintenance, “but we can’t send them to Canada”, Mr Miller said, speaking at the St Petersburg International Economic Forum. He added that Siemens Energy was trying to find a solution to the problem.
Mr Miller said rising gas prices had offset the blow of a double-digit decrease in Gazprom’s exports to Europe and Turkey. “Prices have grown ... several times. So excuse me but if I said we are not mad at anyone I wouldn’t be lying.”
Mr Habeck said Berlin had been aware Canada’s sanctions might affect the maintenance schedules for Nord Stream’s compressor stations but that this was only likely to become a problem in the autumn.
The technical reasons cited by Gazprom were just a “pretext” and the cut in flows was a “political action”, he added. “[Russian president Vladimir] Putin is doing what we always feared he would do from the start. He is reducing the volume of gas, not at one fell swoop but gradually.”
Sergiy Makogon, chief executive of Ukraine’s state-owned gas transmission network, said on Thursday: “The Kremlin [has] decided to continue escalation and blackmailing of the EU.” Russia could compensate for lower volumes going through Nord Stream by increasing gas supplies via Ukraine and Poland, he said, but “they do not have [the] will” to do so.
Meanwhile, Eni said in a statement that Gazprom’s gas delivery shortfall had worsened. The company said it had requested additional supplies to be delivered on Thursday to compensate for the cut the previous day. But Gazprom said it would deliver only 65 per cent of Eni’s request, or about 32mn cubic metres – far short of the amount needed to recover lost volumes.
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Eni said Gazprom had blamed the shortfall on problems at its Portovaya plant, which feeds Nord Stream.
In Austria, which imports about 80 per cent of its gas from Russia, OMV said that despite reduced flows, demand could be covered using existing stores and supplies from the spot market, thanks to reduced consumption during the current heatwave. “The supply of our clients is ensured,” the company added.
However, analysts warned that while immediate gas supplies could be met, filling storage ahead of peak winter demand would be much more difficult if Russian supplies continued to fall. — Copyright The Financial Times Limited 2022
