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Nord Stream 1 pipeline to shut for three days, increasing pressure on Europe

by jcp

By Christoph Steitz and Thomas Escritt

FRANKFURT/BERLIN (Reuters) -Russia will halt gas supplies to Europe for three days at the end of the month via its main pipeline into the region, state energy giant Gazprom said on Friday, piling pressure on the region as it seeks to refuel ahead of winter.

The unscheduled maintenance order on the Nord Stream 1 pipeline, which runs under the Baltic Sea to Germany, deepens an energy standoff between Moscow and Brussels which has already helped send inflation surging in the region and raised the risk of rationing and recession.

Gazprom said the three-day shutdown was because the pipeline’s only remaining gas compressor requires maintenance, yet the move will bring further disruption particularly for Germany, which depends largely on deliveries from Moscow to power its industry.

The latest shut-down follows a 10-day scheduled annual maintenance that took place in July, and raised fears over whether Russia would resume supplies, which have been reduced since mid-June.

Germany has already had to give Uniper – its largest importer of Russian gas and the highest-profile corporate victim of Europe’s energy crisis so far – a 15 billion euro ($15.1 billion) bailout after Russia drastically cut flows, forcing it to buy gas elsewhere at much higher prices.

The broader Germany economic impact was highlighted in producer price data on Friday which in July saw their highest ever increases, both year-on-year and month-on-month, as energy costs skyrocket.

GERMAN DEPENDENCE

The Nord Stream pipeline had already been running at just a fifth of its capacity, stoking fears that Russia could halt flows completely heading into the winter heating season and make it more difficult to fill up storage facilities.

Germany has made targeted efforts to fill up its storage facilities to prepare, with levels standing at 78.19% as of Aug. 17, slightly more than the 75.89% for the European Union as a whole.

After maintenance is complete, and “in the absence of technical malfunctions”, flows of 33 million cubic metres (mcm) a day – in line with current volumes – will resume, Gazprom said.

This would still be just 20% of Nord Stream’s full capacity of 167 mcm per day.

Gazprom said maintenance work at the remaining Trent 60 gas compressor station would be carried out together with Siemens. The Russian group has previously blamed faulty or delayed equipment for lower flows. Germany says this is a pretext to hurt its economy.

Siemens Energy, which is in charge of maintaining the Nord Stream 1 turbines, declined to comment.

Earlier, senior German politicians from governing parties rejected suggestions that gas shortages could be alleviated by allowing the suspended Nord Stream 2 pipeline to go into service, something the Kremlin has suggested as a solution.

“I strongly suggest we spare ourselves the humiliation of always asking (Russian President Vladimir) Putin for something that we’re not going to get,” said Kevin Kuehnert, number two official in Chancellor Olaf Scholz’s Social Democrats.

“The dependence on him has to end for once and all,” he added in an interview with website t-online.

($1 = 0.9958 euros)

(Reporting by Christoph Steitz and Thomas Escritt; Editing by Kirsten Donovan and David Holmes)

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