Gazprom says turbine paperwork delay will mean further gas cuts, prices soar
Quantum Commodity Intelligence - Russian gas export monopoly Gazprom said Monday that delays to paperwork have meant it would cut off another turbine on the Nord Stream 1 gas pipeline, leaving supply at just a fifth of its nameplate capacity from the middle of this week.
Gazprom said Monday that it would restrict flows from its Portovaya compressor station from 0700 local time on Wednesday, with maintenance having overrun due to the slow return of spare parts for a turbine.
The announcement sparked a 10.5% rise in European gas prices, with the Aug22 contract closing at €176.61/MWh compared to mid-June levels of €80/MWh, while Dec22 was up by 9.75% to €179.57/MWh.
Blaming technical legislation and the condition of the turbine that is to be shut down, Gazprom said flows would slump to around 33 million cubic metres per day, about half its already restricted flow and well below the 160 million cubic metres per day it is capable of handling.
The latest twist in a long-running dispute between Russia and its European buyers, a shut-off last week appeared to have briefly found resolution as flows restarted along the Baltic Sea pipeline after a nine-day long maintenance shut-off.
That shutdown was overshadowed by a dispute over a turbine, with seasonal maintenance of the spare part by Siemens being held up when it was sent to Canada for maintenance.
Authorities in Canada refused to allow the part to be returned to Russia, citing its sanction regime following Russia's February invasion of Ukraine.
A workaround was eventually found that involved sending the spare part via Germany, although Gazprom has since appeared to drag its feet over a full restart of the pipeline, demanding additional paperwork and a more detailed explanation of the incident.
"Gazprom received documents from the Canadian authorities from Siemens… Gazprom has studied these documents but is forced to state that they do not remove the previously identified risks and raise additional questions," Gazprom said Monday.
Russia is the world's largest natural gas exporter and the EU imported around 155 billion cubic metres from Russia last year, around 45% of its imports and almost 40% of its consumption.
Last week, the EU warned members that they should make plans to cut consumption by 15% from the end of the month, warning that uncertainty around Russian supply is leaving the 27-member bloc vulnerable to political pressure from Moscow.
