LONDON (Reuters) — Cuts in supplies from Russia through its main gas pipeline to Germany will prevent countries from meeting their storage-filling targets and Europe’s biggest economy will have to ration industry to keep its citizens warm through the cold months. ‘winter.
European politicians have repeatedly said that Russia could cut off gas flows this winter, pushing Germany into recession and sending prices soaring for consumers already struggling with inflation at multi-year highs.
So far, the most publicized victim of reduced gas flows from Russia is Germany’s biggest gas importer, Uniper. The government was forced last week to bail it out.
Pressure on Germany intensified on Monday when Gazprom said it had to shut down a turbine, meaning flows via Nord Stream 1 from Russia to Germany will drop to just 20% of their capacity from Wednesday.
Gazprom previously cited the delayed return of another turbine undergoing maintenance to Canada as the reason for reducing flows to 40% in June before shutting them down completely for 10 days of scheduled maintenance this month.
After the scheduled repair period, Gazprom resumed pumping as planned on July 21, but at the reduced level of 40%.
Even before the latest cut was announced on Monday, Germany’s energy grid regulator had said the country would struggle to meet its storage target.
The European Union as a whole plans to reload storage to 80% capacity by November 1 to provide a buffer for the winter months of peak demand. So far, European gas storage levels are 66% full, according to data from Gas Infrastructure Europe.
Germany has an even higher target of reaching 95% infill by November.
At 20% capacity, Europe will only be able to recharge storage to 75% to 80% before winter, consultancy Wood Mackenzie said on Monday.
“As a result, Europe is likely to go through the heating season with just 20% gas in storage at the end of March – a very low level,” said Kateryna Filippenko, principal analyst, global gas supply, at wood mackenzie.
A very cold winter would aggravate the situation, especially if the weather is severe in Asia, as well as in Europe, which would limit the global availability of liquefied natural gas or LNG to supplement the supply of pipelines.
Tightening by pressure
Gas flows via other pipeline routes, such as Ukraine, have also declined since Russia invaded its neighbor in February, in what Moscow calls a “special military operation”, and the risk of a cut total via Nord Stream 1 is looming.
While Germany is particularly dependent on Russian gas, Austria and Central and Eastern Europe are also major users of Russian supplies.
Ahead of turbine maintenance cuts in Canada, Russia cut off gas flows to Bulgaria, Denmark, Finland, Dutch company Gasterra and Shell for its German contracts, after they all rejected a Kremlin request issued in March to switch to ruble payments.
Analysts and politicians say it would be very easy for Russia to find other reasons for further cuts.
“The key question is whether Russia wants to max out the pressure now and derail Europe’s plans to replenish its gas stocks by the fall, or whether Moscow wants to keep its powder dry until later. within the year,” said Ben Cahill and Isabelle Huber.
The European Union has prepared for the prospect of a continued drop in supplies or a complete shutdown by seeking alternative suppliers, encouraging energy conservation and increasing coal production.
Last week the European Commission, the EU’s executive, proposed a target for all member states to reduce gas consumption by 15% from August 1 to allow storage to fill up faster.
But the plan is meeting resistance from member states, with some adamantly opposed to binding cuts and others unwilling to let Brussels control their energy use.
“The entire European energy system is in crisis, and even with the restart of Nord Stream 1, the region is in a difficult position with continued energy security risk,” said Karolina Siemieniuk, an analyst at consultancy Rystad. Energy.
“European countries will need to work together quickly if they are to survive the winter relatively unscathed and even if they do, the specter of the next winter in 2023/24 is likely to keep prices high for months.”