BRUSSELS/LONDON, July 20 (Reuters) – The European Union advised member states on Wednesday to cut gas usage by 15% till March as an emergency step after President Vladimir Putin warned that Russian provides despatched through the largest pipeline to Europe may very well be lowered additional and may even cease.
Deliveries through Nord Stream 1, which accounts for greater than a 3rd of Russian gas exports to the EU, are due to resume on Thursday after a 10-day halt for annual upkeep.
German gas community operator Gascade stated on Wednesday it expects flows to resume at pre-maintenance ranges based mostly on present requests for gas.
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On July 10, the final full day earlier than upkeep on the pipeline began, flows stood at round 698 GWh.
Supplies through the route had been lowered even earlier than the upkeep outage in a dispute over sanctions, and will now be cut additional, whereas flows through different routes, reminiscent of Ukraine, have additionally fallen since Russia invaded its neighbour in February.
The disruptions have hampered Europe’s efforts to refill gas storage earlier than winter, elevating the danger of rationing and one other hit to fragile financial progress if Moscow additional restricts flows in retaliation for Western sanctions over the warfare in Ukraine.
The European Commission proposed a voluntary goal for all EU states to cut gas use by 15% from August to March, in contrast with their common consumption in the identical interval in 2016-2021.
“Russia is blackmailing us. Russia is using energy as a weapon. And therefore, in any event, whether it’s a partial, major cut-off of Russian gas or a total cut-off of Russian gas, Europe needs to be ready,” EU Commission President Ursula von der Leyen stated.
The Commission proposal would allow Brussels to make the goal necessary in a provide emergency, if the EU declared a considerable threat of extreme gas shortages. learn extra
The transfer, which wants the backing of EU states, might be mentioned on Friday so ministers can approve it on July 26.
“We believe that a full disruption is likely,” one EU official stated. “If we wait, it will be more expensive and it will mean us dancing to Russia’s tune.”
EU states are attempting to guarantee storage services are 80% full by Nov. 1, from about 65% now. https://tmsnrt.rs/3RMqnZg
WILL FLOWS RESUME?
European politicians say Russia is utilizing technical points as a pretext to cut deliveries. The Kremlin says Russia is a dependable power provider and blames sanctions for lowered flows.
Two Russian sources accustomed to export plans stated flows through Nord Stream 1 have been anticipated to restart on Thursday however beneath capability of 160 million cubic metres (mcm) per day.
Kremlin-controlled Gazprom (GAZP.MM) cut gas exports through the route to 40% capability in June, blaming delays to the return of a turbine that Siemens Energy (ENR1n.DE) was servicing in Canada.
That turbine, which was caught up in sanctions, was reported this week to be on its approach again, though Gazprom stated on Wednesday it had not acquired documentation to reinstall it and stated the turbine’s return and upkeep of different gear was wanted to maintain the pipeline operating safely. learn extra
Putin stated there could be an additional discount in provides or perhaps a full halt to flows through the pipeline that runs below the Baltic Sea to Germany, which depends closely on Russian gas.
He stated gear was being returned from Canada however stated the standard of the returned gear and different parameters meant the pipeline may nonetheless be shut down sooner or later.
“Maybe… they will turn it off at some point, and that’s it, and Nord Stream 1 will stop, because they came from there, from Canada,” he stated in televised feedback, with out elaborating. learn extra
Gas costs have rocketed in risky commerce for the reason that Ukraine disaster erupted. The front-month gas contract climbed above 160 euros per megawatt hour (MWh) on Wednesday, 360% up on a 12 months in the past however beneath its March peak of 335 euros.
‘CRUMBLING’ EQUIPMENT
The surge in worth has squeezed utility firms, triggering bankruptcies. In Germany, the federal government plans to inject billions of euros into the nation’s greatest purchaser of Russian gas, Uniper (UN01.DE). learn extra
Siemens Energy stated sustaining generators for Nord Stream 1 would usually be a routine matter. It stated it could proceed sustaining gear below sanctions if potential and the place required, and it could work as quick because it might. learn extra
In earlier remarks, Putin stated one of many 5 gas pumping items, operated by Siemens Energy at Nord Stream 1, was out of order due to a “crumbling of inside lining” and one other was due to be despatched for upkeep on July 26.
Putin stated Gazprom, which has a monopoly on Russian gas exports by pipeline, was not to blame for the discount of gas transit capability through a community of pipelines to Europe.
He blamed Kyiv for closing one route through Ukraine, though Ukraine’s authorities blame the shutdown on Russia’s invasion.
In its pivot east, Gazprom stated on Wednesday Russian gas provides heading to China hit a new day by day report. Moscow has been increasing capability to provide China as deliveries to Europe dwindle, though Russia’s far east community shouldn’t be related to the European provide system.
European nations, in the meantime, have been chasing different provides, though the worldwide gas market was stretched even earlier than the Ukraine disaster, with demand for the gas recovering from the pandemic-induced downturn.
Those efforts have included searching for extra gas from suppliers linked to Europe by pipeline, reminiscent of Algeria, and by constructing or increasing extra liquefied pure gas (LNG) terminals to obtain shipments from a lot additional afield, such because the United States.
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Reporting by Reuters bureaus; Writing by Edmund Blair; Editing by Carmel Crimmins, Elaine Hardcastle and Barbara Lewis
Our Standards: The Thomson Reuters Trust Principles.
