March 30, 2023

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Russia announces deeper cuts in natural gas flows to Germany

Russia announces deeper cuts in natural gas flows to Germany

Gazprom, Russia’s state-owned gas monopoly, said on Monday it would reduce the amount of natural gas it sends to Germany via the Nord Stream 1 pipeline, less than A week after it resumed limited flows After stopping the annual maintenance.

Flows have already been reduced to 40 percent of capacity, but Gazprom said It will squeeze it to 20 percent starting Wednesday, citing problems with one of its powerful turbines made by Germany’s Siemens Energy. The turbines build pressure inside the pipeline to charge gas over long distances.

In mid-June, Russia began reducing the amount of gas shipped through its 760-mile undersea pipeline, blaming a missing turbine that had been shipped to Canada for repairs.

On Monday, Gazprom He said On her social media accounts, she said she was “shut down another Siemens gas turbine engine”.

The German Economy Ministry has long dismissed Gazprom’s argument that damaged turbines are to blame for the restrictions on gas flow, saying instead that the cuts are another way for Russia to punish Europe for opposing the war in Ukraine.

The Berlin government opposed the latest expected reduction of Gazprom.

“Based on our information, there is no technical reason to reduce deliveries,” the German Economy Ministry said in a statement following Gazprom’s announcement.

Observers said the move shocked President Vladimir Putin’s determination to use Russia’s energy exports as a stick to punish and divide European leaders by loosening or tightening the taps What suits him and his military objectives in Ukraine.

Natural gas prices in Europe jumped 12 percent on Monday, according to the regional benchmark contract for gas traded in the Netherlands. The price of natural gas has more than doubled this year to around 180 euros ($184) per megawatt hour.

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“The Gazprom announcement should come as no surprise,” said Simon Tagliabitra, senior fellow at Bruegel, a Brussels-based think tank. “Russia is playing a strategic game here. The already low volatility of flows is better than a full cut because it manipulates the market and improves the geopolitical influence.”

European Union energy ministers meet in Brussels on Tuesday to discuss a proposal to make citizens and businesses in the 27-member bloc an energy provider. But divisions have emerged as countries not heavily dependent on Russian gas, such as Greece and Spain, have resented the idea of ​​needing to cut consumption to help Germany, its wealthy northern partner.

Prior to the Russian invasion of Ukraine, Germany relied on Russia to provide 55 percent of its total natural gas needs. It has cut that share to 30 percent over the past four months, but is striving to save enough fuel to ensure it has enough stores to beat the winter.

Hours before Gazprom announced the new cuts, the head of Germany’s network regulator, Klaus Muller, said the country’s storage facilities had reached 65.9 percent of capacity and were therefore “finally back on track”. The goal is to have storage 75 percent full by the beginning of September.

Mr. Tagliabitra said Gazprom’s announcement should have made clear to all EU members how important it is to act quickly and decisively to start providing gas. “You can’t put off taking action on this any longer.”