Russia tightens gas supplies to Germany, Italy

Russian gas monopoly Gazprom has blamed the cuts on delayed pipeline repairs. PHOTO: AFP

BERLIN (NYTIMES) - Gazprom, the Russian gas monopoly, said on Wednesday (June 15) that it was further tightening natural gas supplies through a key pipeline to Germany.

The company said flows through the pipeline, Nord Stream 1, would be cut by 60 per cent, a day after announcing a 40 per cent reduction.

Gazprom said the cuts were necessary because a turbine for a compressor station in northwestern Russia was sent for repairs and had not returned in time.

Siemens Energy, the German manufacturer of the turbine, said the turbine had been sent to Canada for maintenance at a specialised facility in Montreal and that its return had been delayed because of Ottawa's sanctions on Russia.

Siemens Energy said it was trying to resolve the situation.

The German government, however, said it suspected that Gazprom might be using the delays from repairs to score political points and make it more difficult for Germany and Europe to achieve their stated goals of building a buffer of stored gas for winter when demand for the fuel will increase.

"The Russian side's justification is simply a pretext," Robert Habeck, Germany's economy minister, told reporters in Berlin on Wednesday. "It is obviously the strategy to unsettle and drive up prices."

Adding to worries, Eni, the Italian energy company and a major Gazprom customer, said on Wednesday that the Russian company said it would cut gas supplies by about 15 per cent for the day.

An Eni spokesman said Gazprom had not given reasons for tightening supplies.

At present, there does not seem to be a risk of immediate shortages.

Germany and other countries have been importing an excess of gas to fill storage facilities. Habeck said enough gas could be found on the market, although at high prices.

Until Tuesday, the gas situation in Europe seemed relatively stable despite the war in Ukraine. Storage across the European Union had built up to over 50 per cent, about 10 per cent better than a year ago. Analysts even expressed concerns that European utilities might be stuck with too much gas.

Gazprom's moves over the past two days have rekindled worries about a major cutoff of supplies to Europe. After a sharp increase on Tuesday, gas prices rose about 25 per cent on the TTF exchange to €121 a megawatt-hour, about six times the level of a year ago.

It is standard industry practice to sock away gas in storage tanks in the summer, when demand is low and gas is relatively cheap, and then burn it in the winter.

Last year, however, prices never dropped to low levels, and less gas than usual went into storage.

Some analysts say that Gazprom deliberately kept the levels in its facilities in Germany low and otherwise tried to influence markets in the lead-up to Russia's invasion of Ukraine.

Join ST's Telegram channel and get the latest breaking news delivered to you.