LONDON (ICIS)–Russian natural gas producer
Gazprom announced abruptly late on Friday on
that the Nord Stream 1 pipeline to Europe will
not resume flows on 3 September as expected,
citing equipment maintenance.
The announcement is set to push up prices
across European hubs in the next trading
session on 5 September, considering how Russian
supply constraints have spurred price hikes in
recent months.
Flows were poised to resume early on 3
September following a scheduled three-day
maintenance at levels comparable to before the
works. But Gazprom’s announcement, which came
minutes after European gas markets had closed
for the day, indicated no flows can be expected
in the foreseeable future along the pipeline.
Nominations from the pipeline operator earlier
on Friday had indicated flows to Germany via
the link were set to resume at around 32
million cubic metres (mcm)/day on 3 September.
SUPPLY UNCERTAINTY
Uncertainty around the supply of Russian gas to
Europe has escalated price shocks on the Dutch
TTF in recent months.
“When it went offline on 31 August, Nord Stream
1’s 32mcm/day flows represented about 3% of
total European supply. While a small amount,
these molecules will need to be replaced by
much more expensive methods – either drawing
additional LNG from the global market or by
destroying demand in Europe,” said Thomas
Rodgers, gas markets analyst at ICIS.
This now leaves remaining Russian gas supply to
Europe via Ukraine and TurkStream. As of 2
September, remaining Russian flows to Europe
stood at around 75-80mcm/day, equating to about
7% of European supply, including LNG sendout.
Total Russian flows this time last year were
about 380mcm/day, more than a third of all
supply to Europe.
TurkStream nominations at 12:30 CET showed that
up to 44mcm/day could flow into Bulgaria from
Turkey on 2 September.
The ICIS TTF October ‘22 contract price was
assessed at €206.90/MWh ($60.92/MMBtu) on 2
September, a 17% drop from the previous day’s
close.
The price fall was driven by the expected
return of Nord Stream 1, high European gas
storage fullness and expectations of strong LNG
shipments to Europe.
OIL LEAK
Gazprom stated in a Telegram post on 2
September that during recent maintenance at the
Portovaya compressor station, in combination
with Siemens Energy, an oil leak was detected.
The statement added that as the damage does not
allow for safe operation of the gas turbine
engine impacted, its operation has been
suspended.
The statement cites information from Siemens
Energy saying that elimination of the leak is
only possible in a specialised repair facility.
The three-day maintenance was first announced
on 19 August. In that occasion, Gazprom said on
Telegram that flows would resume to 33mcm/day
by the end of the works.
In reaction, the ICIS TTF front month rocketed
to new all-time highs in the following
sessions, gaining almost a third in value
between 19-26 August. Ruth Liao and Kaja
Sillett
Additional reporting by Aura Sabadus and Hal
Brown
https://www.icis.com/explore/resources/news/2022/09/02/10802070/breaking-news-nord-stream-1-gas-flows-to-europe-to-remain-suspended-indefinitely-russia-s-gazprom
