Officials question motives for Russia's gas pipeline halt

Pipes on the landfall amenities of the ‘Nord Stream 1’ gasoline pipeline are pictured in Lubmin, Germany, March 8, 2022. REUTERS/Hannibal Hanschke

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Sept 2 (Reuters) – Russia stated on Friday it discovered leaks throughout upkeep on the Nord Stream 1 pipeline that provides pure gasoline to Europe and can preserve it shut for an undisclosed interval.

Flows won’t resume till all faults are rectified, Russia stated in a press release, a worrisome growth for Germany and different international locations, hoping to construct gasoline shares earlier than winter.

Nord Stream 1 operator Gazprom had shut the road on Aug. 29 for 3 days of upkeep, and was on account of resume flows to Germany on Saturday. The Russian state firm stated it discovered an oil leak that meant a pipeline turbine couldn’t run safely.

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The upkeep shutoff was a pretext, stated Brussels, which accused Russia of utilizing gasoline as an financial weapon to retaliate for Europe’s assist of Ukraine. A repaired turbine readied for Gazprom has been caught in Germany.

COMMENTS:

MICHAEL ROTH, CHAIR OF THE GERMAN PARLIAMENTARY FOREIGN AFFAIRS COMMITTEE

“That is a part of Russia’s psychological conflict in opposition to us,” he tweeted. “Putin violates contracts with out scruples, turns the gasoline faucet on and off, even on the expense of his personal financial pursuits. Nord Stream 2 will not assist with this, solely power transition and power diversification.”

CONNOR MCLEAN, SENIOR ENERGY ANALYST AT BTU ANALYTICS, A FACTSET COMPANY

“Europe is on tempo to enter this winter in a extra advantageous storage place than in 2021, however storage alone won’t be sufficient to get by the winter. Demand will virtually definitely should be curtailed if Nord Stream stays offline for a big time period.

“There’s additionally a threat that U.S. LNG exports will probably be diminished within the coming months as hurricane exercise begins to develop within the Atlantic and as amenities have to go offline for routine upkeep.”

ERIC MAMER, EUROPEAN COMMISSION SPOKESPERSON

“Gazprom’s announcement this afternoon that it’s as soon as once more shutting down Nord Stream 1 below fallacious pretenses is one other affirmation of its unreliability as a provider,” he stated in a tweet.

“It is also proof of Russia’s cynicism, because it prefers to flare gasoline as an alternative of honoring contracts.”

WHITE HOUSE NATIONAL SECURITY COUNCIL SPOKESPERSON

“It’s sadly not stunning that Russia continues to make use of power as a weapon in opposition to European shoppers. The U.S. and Europe have been collaborating to make sure ample provides can be found.

“Because of these efforts, European gasoline storage will probably be full by the essential winter heating season. These efforts alone won’t suffice and we are going to proceed to work collectively to handle the regarding power image in Europe.”

MASSIMO DI ODOARDO, VICE PRESIDENT, GAS AND LNG RESEARCH FOR WOOD MACKENZIE

“A whole shutdown will clearly have implications on market sentiment given how tight the market is and can enhance the chance of additional cuts by way of different pipelines bringing Russian gasoline to the EU by way of Ukraine and Turkey. Costs will inevitably shoot up on Monday when markets will re-open.”

TOM MCNULTY, MANAGING DIRECTOR AT CHIRON FINANCIAL, HOUSTON, TEXAS

“Russia made all of those calculations previous to attacking Ukraine, and may play a sport of hen with Central and Western Europe by way of crude oil and pure gasoline. Russian holds most, if not all, of the playing cards, and doesn’t should blink first. India and China proceed to fund some share of the Russian conflict effort by buying huge volumes of Russian commodities at discounted costs. That is the query: which comes first – Russia runs of money to struggle Ukraine or the warmth and lights exit in Europe this winter?”

JOSH YOUNG, CHIEF INVESTMENT OFFICER, BISON INTERESTS, HOUSTON

“It looks like Russia is making an attempt to pressure gasoline costs excessive sufficient that oil is used for energy and warmth technology” as an alternative of gasoline, he stated. “It is income maximizing for them to have excessive TTF & JKM costs and excessive oil costs,” he added, referring to European and Asian gasoline worth indexes by the acronyms.

ANDREW LIPOW, PRESIDENT OF LIPOW OIL ASSOCIATES, HOUSTON

“It’s only going to cement Europe’s bitter divorce from Russian power provides over subsequent couple of years and additional Europe’s want to place in place infrastructure amenities to wean themselves off of Russian gasoline.

“Within the close to time period there definitely will probably be a worth to pay on the a part of the patron, paying extra for pure gasoline and electrical energy in Europe. However I feel that is additionally going to harden the resolve of the European Union to reduce their dependence on Russian power provides.

“There could also be short-term achieve for Russia, particularly politically if this ends in social unrest in Europe, however the blame goes to be pointed on Russia and in the long run that would have a severe detrimental impact.”

MAURO CHAVEZ RODRIGUEZ, RESEARCH DIRECTOR, EUROPEAN GAS & LNG MARKETS, WOOD MACKENZIE

“Ought to Nord Stream flows not resume, and if we’ve a median winter, European inventories may find yourself at 26% by the top of March 2023, which continues to be a optimistic outlook as Europe may have increased ranges than it had at first of 2022 summer time.

“The principle threat is within the state of affairs that Europe faces an especially chilly winter this yr. If it occurs, we estimate that Europe may finish winter with 8% of storage degree. That is beneath the technical limits, which, summed with energy market tightness on account of decrease nuclear, coal and hydro-power outputs, may lead to gasoline and energy demand rationing.”