Sep 5, 2022
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Brief shutdown of Nord Stream for planned repairs caused hysteria in the EU

Brief shutdown of Nord Stream for planned repairs caused hysteria in the EU

Photo: Egor Aleev / TASS

The operation of the Nord Stream gas pipeline (SP) was completely stopped due to serious malfunctions in the turbine discovered during routine maintenance, the press service of Gazprom reports. The Gazprom telegram channel also provides photographs of malfunctions.

The decision to stop was made after the maintenance of the Trent 60 gas compressor unit at the Portovaya compressor station. According to widespread information, oil leakage at terminals, cable connections and other places was discovered during maintenance work carried out jointly with Siemens representatives. They also signed the relevant act.

According to Gazprom, a warning was received from Rostekhnadzor that the detected malfunctions do not allow “to ensure trouble-free and safe operation of the gas turbine engine”, so its work should be suspended. It should be added that similar oil leaks were detected earlier on some other gas pumping units, they were also stopped.

Earlier, the Kremlin warned that it was impossible to guarantee the 100% reliability of the gas pipeline, since only one turbine is currently operating.

In the European Union, of course, the decision of the Russian gas company was regarded as political. President of the European Council Charles Michel tweeted that the gas company’s move “didn’t come as a surprise”. “The use of gas as a weapon will not change the resolve of the EU. We will accelerate our path to energy independence,” the European official said.

The German Finance Ministry told the DPA news agency that the FRG “steadily and consistently” continues to make efforts to strengthen its independence from Russian energy supplies. “So we are better prepared now than we were a few months ago,” a spokesman for the ministry said.

In addition, the current shutdown of the joint venture occurred against the backdrop of statements by the head of the European Commission Ursula von der Leyen on the introduction of restrictions on the cost of Russian gas supplied to Europe.

President of the Union of Oil and Gas Producers of Russia Gennady Shmal recalled that Nord Stream was stopped for only two or three days to carry out the necessary repairs, which could affect the European gas market.

“But in the current situation, the European Union has no one to blame but themselves. To prevent such situations, it was necessary to launch Nord Stream 2 long ago, which has been ready for operation for almost a year, but is still idle. If it worked, there would be no problems in this regard. And now they have no choice but to wait. There is nothing terrible. This, in general, is quite a common situation – preventive and repair work is necessary for the stable operation of the gas pipeline.

“SP”: – But European politicians have already raised a wave, they say that Russia, they say, is using its “energy weapon”.

“This, of course, is complete nonsense. Our country at any time, even in the most difficult times, during the Cold War, ensured the supply of those volumes of fuel that were provided for by contractual obligations. And the behavior of the Europeans shows that they cannot be called reliable partners: either they declare their readiness to completely abandon our gas, or they throw a tantrum about stopping the gas pipeline to carry out the necessary work.

“SP”: – And if there was no story with turbines hung in Canada, could this somehow positively affect the current situation?

– Of course. Although we did not stop the gas pipeline due to the delay of this turbine, this, of course, has an impact on the overall situation. On the security of supply, in particular. In general, in this situation, our Western partners behave differently than is customary in a serious business environment. It was their duty to repair the turbine in time, replace the blades there, and perform other work. In principle, we should think about carrying out this kind of repair work in our country. We have enough enterprises that produce such products and are able to service them. So for us, this story will also become a science.

“SP”: – And against this background, the European Union is discussing the introduction of a price ceiling for our gas …

“And what are we doing here?” We are not involved in the prices that are accepted on the spot market, under $3,000 per thousand cubic meters. Gazprom supplies fuel at prices fixed in long-term contracts. Plus or minus fluctuations, of course… Traditionally, our gas price is tied to the oil price, because we don’t have our own separate gas exchange, which is wrong. It should be like this. The gas going through the pipes is sold for $250-300, and the price on the spot is already the one at which it is sold by speculators.

Leading expert of the National Energy Security Fund Igor Yushkov believes that the growth of gas prices in Europe in the short term is quite possible.

– This may be an emotional reaction of the market, somewhat panicky, and it is possible that we will see a price of more than $3,000 per thousand cubic meters, but in general, September-October is the time for the market to calm down. Because the Europeans have filled 80 percent of their underground gas storage facilities, a goal that they set in the spring. And from this they calm down a little, besides, the heat subsides, less energy is required for air conditioning. Plus, a number of specific things will begin to operate – it will rain, hydropower will start working, nuclear power plants will start working, their reservoirs will be filled. It will be a little easier. But from November, with the beginning of the heating season, we can expect a deep crisis in the European energy sector.

“SP”: – What can it be connected with?

— Daily supplies of gas from Russia are becoming less and less. It is still unclear what will happen to Ukrainian transit. If it also stops, then virtually all of western and northwestern Europe will be without Russian gas, up to northern Italy. Only Hungary, Serbia, Greece will remain – those who receive gas through the Turkish Stream. And here the question is how much fuel will be enough in storage, because the declared milestone of 80 percent is a reliable passage of the heating season under average conditions over the past five years. And this is despite the daily flow of gas from Russia, on average, at the level of the last five years. But deliveries from Russia have already been drastically reduced. It is possible that they will be further reduced if they are not pumped through Ukraine. So, it is possible that prices will jump again during the heating season – up to 4,000 per thousand cubic meters, as Gazprom said, or even higher. It is possible that some consumers will even have to be disconnected from the gas. But everything will depend on many factors – the temperature in winter and others.

“SP”: – With such prospects to discuss the price ceiling for Russian gas …

– This is a direct way to stop the supply of our fuel. Gazprom will perceive this as a violation of the agreement, where the pricing formula is spelled out. The company will state that it cannot supply gas without the agreed payment being made. This will be the exclusively legal position of the Russian side.

The stoppage of Gazprom’s supplies was announced by Deputy Director of the National Energy Security Fund Aleksey Grivach.

– The effect will be the opposite of the declared. Then, instead of a price ceiling, Europeans will see “the sky in diamonds.” On the other hand, the task of the Western party of the “energy war with Russia” is not to ensure the supply of energy to European consumers, but to break the remnants of ties with our country.

“SP”: – What is the probability of price fluctuations in the gas market after this temporary stop of the “Nord Stream”?

– Price fluctuations will definitely be with an upward trend. Since there will be less available energy, and the situation may degrade further.

“SP”: – And how fair are the accusations against Russia of the use of “energy weapons” by the EU in the situation with the shutdown of the gas pipeline?

They have sounded before. Moreover, they came up with this idiom 40 years ago, when the US opposed the first big project to supply gas from the USSR to Western Europe (Urengoy-Pomary-Uzhgorod). As for fairness, one might think that Russia imposed sanctions and did not return the turbine, and it also stated that it would not fulfill obligations under long-term contracts as soon as it found a replacement for the European market. And before that, she refused to launch the built Nord Stream 2. In my opinion, it was the other way around. And the Europeans need to look for those responsible for the destruction of their energy security among their own politicians and “allies”.

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