Russia Shuts Down Gas Pipeline For Maintenance—Europe Holds Breath, Worried It Won’t Re-Open

Topline

Russia has shut down the supply of natural gas to Europe through the Nord Stream 1 pipeline on Monday to carry out scheduled maintenance, a move that raised fears in Europe of a possible extended shutdown by Russia in retaliation to sanctions, which could trigger an energy crisis.

Key Facts

The Nord Stream 1 pipeline—which carries gas from Russia to Germany through the Baltic Sea—is scheduled to remain shut for the next 10 days as repairs are carried out.

Klaus Mueller, the head of Germany’s energy regulator, told Reuters that gas supply via Nord Stream dropped to zero on Monday “as expected.”

Delays in scheduled maintenance have happened before and Muller notes that any potential delay will not be known a day before the 10-day deadline ends.

A major concern among European officials is that Russia may deliberately delay the resumption of gas supplies or even keep it shut in an effort to punish western Europe for its sanctions against Moscow and military support for Ukraine.

Big Number

40%. That is the capacity at which the Nord Stream 1 pipe was operating since June 14 as Russia moved to sharply cut supplies. The Russian state-run gas giant Gazprom attributed the 60% drop to equipment issues that could not be resolved due to sanctions.

Tangent

After intense lobbying by Germany, Canada on Saturday agreed to an exemption in its sanctions against Russia to allow for the export of a critical piece of equipment that is expected to help resolve equipment issues on the pipeline and return supply levels to normal. The move, however, came under criticism from the Ukrainian government, which claimed that it would only encourage Moscow to use natural gas to gain concessions from the West.

Key Background

Last month, Germany triggered the second phase of its three-stage gas emergency plan amid concerns about the drop in supply from Russia. Under this “alert stage” the German federal government urged citizens and local governments to cut back on gas usage as much as possible and warned about an increase in gas prices. German economics minister Robert Habeck described the situation as a “gas crisis” and accused Putin of deliberately carrying out an economic attack on Germany. A day later, Habeck warned of potential industry shutdowns and job losses if gas reserves run low in the winter and added that a further slump in supplies from Russia could cause a 2008 Lehman Brothers-style collapse of Europe’s energy sector. So far Russia has suspended the supply of gas to Poland, Bulgaria, Netherlands, Denmark and Finland after they refused to comply with its mandate to make payments using a rubles bank account.

What To Watch For

Germany’s gas reserves are around 64% full and it needs to have that number up to 90% by December as part of its emergency plan. If it fails to do so and Russia cuts all supply, the German government would be forced to trigger stage three of its emergency plan where it will take over the distribution of gas and carry out rationing.

Further Reading

Germany Reopens Coal Plants Because Of Reduced Russian Energy (Forbes)

German Minister Warns Of ‘Catastrophic’ Industrial Shutdowns And Mass Unemployment If Gas Crisis Continues (Forbes)