MOSCOW, July 25 (Reuters) – Russia tightened its fuel squeeze on Europe on Monday as Gazprom (GAZP.MM) mentioned provides by way of the Nord Stream 1 pipeline to Germany would drop to simply 20% of capability.
Gazprom mentioned flows would fall to 33 million cubic metres per day from 0400 GMT on Wednesday – a halving of the present, already lowered degree – as a result of it wanted to halt the operation of a Siemens fuel turbine at a compressor station on directions from an business watchdog.
Germany mentioned it noticed no technical motive for the newest discount, which comes as Russia and the West change financial blows in response to what Moscow calls its particular army operation in Ukraine.
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The Dutch front-month fuel contract, the European benchmark, closed 9.95% increased on information of the newest blow to Nord Stream 1. The pipeline, which has a capability of 55 billion cubic metres a 12 months, is the only greatest Russian fuel hyperlink to Europe.
The European Union has repeatedly accused Russia of resorting to vitality blackmail, whereas the Kremlin says the shortfalls have been brought on by upkeep points and the impact of Western sanctions.
Politicians in Europe have mentioned Russia might minimize off fuel flows this winter, which might thrust Germany into recession and result in hovering costs for customers already grappling with increased costs for meals and vitality.
Germany was compelled final week to announce a $15 billion bailout of Uniper (UN01.DE), its greatest firm importing fuel from Russia. learn extra
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President Vladimir Putin had foreshadowed the newest minimize, warning the West this month that continued sanctions risked triggering catastrophic vitality worth rises for customers around the globe. learn extra
Russia had already minimize flows by way of Nord Stream 1 to 40% of capability in June, citing the delayed return of a turbine that was being serviced by Siemens Vitality (ENR1n.DE) in Canada – an evidence that Germany rejected as spurious.
It then shut Nord Stream 1 altogether for 10 days of annual upkeep this month, restarting it final Thursday nonetheless at 40% of regular ranges.
The servicing of that first turbine continues to be a matter of dispute because it makes its means again to Russia by way of a tangle of paperwork and conflicting statements.
Gazprom mentioned on Monday it had acquired paperwork from Siemens Vitality (ENR1n.DE) and Canada however “they don’t take away the beforehand recognized dangers and lift further questions”.
It mentioned there have been additionally nonetheless questions over EU and UK sanctions, “the decision of which is necessary for the supply of the engine to Russia and the pressing overhaul of different fuel turbine engines for the Portovaya compressor station.”
Siemens Vitality mentioned the transport of the serviced turbine to Russia might begin instantly, and the ball was in Gazprom’s courtroom.
“The German authorities offered Siemens Vitality with all the required paperwork for the export of the turbine to Russia in the beginning of final week. Gazprom is conscious of this,” it mentioned.
“What’s lacking, nevertheless, are the customs paperwork for import to Russia. Gazprom, because the buyer, is required to offer these.”
The German firm mentioned it noticed no hyperlink between the turbine concern and the fuel cuts applied or introduced by Gazprom. Gazprom didn’t instantly reply to a request for remark.
The Kremlin mentioned earlier that Moscow was not interested by a whole stoppage of Russian fuel provides to Europe, which is straining to fill its underground storage earlier than the height demand winter season.
The disruption has raised the danger of fuel rationing on the continent, with the European Union proposing to member states final week that they minimize fuel use by 15% between August and March in contrast with the identical interval of earlier years.
Russia is the world’s second largest oil exporter after Saudi Arabia and the world’s largest exporter of pure fuel. Europe imports about 40% of its fuel and 30% of its oil from Russia.
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Reporting by Reuters in Moscow; further reporting by Nina Chestney, Marwa Awad and Christoph Steitz; writing by Mark Trevelyan, modifying by Man Faulconbridge, Barbara Lewis and Tomasz Janowski
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