European nations have agreed in principle an emergency plan to cut natural gas consumption by 15% over the next nine months to help offset a shortage of gas from Russia, a move that would affect both household and industrial consumers.
The European Commission’s move came as Russian gas giant Gazprom revealed a plan to further downsize gas supplies via the Nord Stream 1 pipeline to Germany to 33 million cubic metres per day, from 67 MMcmd in late July, citing technical issues at a pumping facility on the Baltic coast.
Gazprom said it must shut down one of the two remaining working turbines that push gas through the subsea pipeline.
The company added that it is still waiting for delivery of an overhauled turbine from Siemens Energy to the facility.
European Union energy ministers approved a proposal for all 27 members to voluntarily cut gas use by 15% from August to March 2023.
Some amendments to the agreement offer exemptions that would allow countries to take different approaches to meeting the overall target.
The cuts could be made binding in a supply emergency, but ministers agreed to exempt several industries, such as steelmaking, along with Malta and Ireland, which are not connected to European gas networks.
Countries on track to meet EU gas storage targets for August could see some exemptions, softening the blow for roughly a dozen states, including Germany and Italy, according to Reuters.
German Economy Minister Robert Habeck told broadcaster ARD: “We are in a serious situation. It is about time that everyone understands that.”
The latest curtailment is “no surprise now, although it is always infuriating that Gazprom puts forward other reasons”, Habeck said. “They do not even have the guts to say, ‘we are in an economic war with you’.”
Mario Mehren, chief executive of Germany’s leading utility Wintershall Dea, echoed the minister, saying that Gazprom “has destroyed the trust that has been built for decades” and that Russia can no longer be considered a reliable energy supplier.
Government officials in Kiev have repeatedly said that Gazprom could easily replace falling Nord Stream 1 volumes by increasing shipments across Ukraine’s onshore gas pipeline network.
The capacity of the country’s Soviet-era system significantly exceeds that of Nord Stream 1 and is less reliant on powerful compressors to move the gas than the 1224-kilometre subsea pipeline.
Pressure spike
Ukraine’s gas transmission authority Operator GTS Ukrainy sounded an alarm Monday evening, saying it had to deal with a sudden unplanned spike in pressure in a key gas trunkline that enters the country from Russia to the east.
Operator GTS Ukrainy said it had sent an emergency note to Gazprom to point out that the Russian company had been slow to send an alert about the pressure increase, potentially putting the pipeline at risk of rupture.
Just one major pipeline border crossing point in the Sumy region between Russia and Ukraine remains in operation after Russian troops took control of a smaller but equally significant crossing in the Luhansk region in Ukraine.
Gazprom has been sending about 40 MMcmd via Ukraine to Europe for over a month now, despite a contractual throughput minimum of about 110 MMcmd for this year.
Prices for August spot gas deliveries at the most liquid European TTF hub in the Netherlands jumped by almost 10% to trade at €195 per megawatt hour ($2100 per thousand cubic metres) on Tuesday as the market saw the increasing possibility of a full halt of Russian gas supplies to northwestern Europe.
Last week’s restart of Nord Stream 1 after maintenance was initially treated as a sign that such hostile action could be avoided, with prices for August contracts ending at €154 per megawatt hour last week.
A possible shutdown of Nord Stream 1 and the Ukrainian route, coupled with the already closed Yamal pipeline across Poland to Germany, would leave Gazprom with just two export systems in operation, the subsea pipelines Blue Stream and TurkStream, crossing the Black Sea to Turkey.
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