Russia won’t immediately resume exports of natural gas to Europe through its Nord Stream 1 pipeline, worsening a shortage that threatens to tip the continent into an energy crisis this winter. On Friday, Russian state energy giant Gazprom said it would not resume flows through the pipeline on Saturday as planned because it had detected an oil leak at its Portovaya compressor station. The pipeline has been shut since Wednesday for maintenance.
It didn’t give a timeline of when exports might resume.
“Until the issues on the operation of the equipment are resolved, gas supplies to the Nord Stream gas pipeline have been completely stopped,” Gazprom said in a statement. The Nord Stream 1 pipeline is a key artery carrying Russia’s vast gas supplies to Europe, accounting for about 35% of Europe’s total Russian gas imports last year. It flows directly to Germany, the bloc’s biggest economy, which is particularly reliant on Moscow’s gas to power its homes and heavy industry.
But Russia has been in an energy standoff with Europe since it invaded Ukraine in late February.
The news of the extended shutdown comes on the same day as the West’s biggest economies agreed to impose a price cap on Russian oil in a bid to limit Moscow’s ability to finance its war, while keeping a lid on global inflation. That could result in countries blocking insurance cover or financing for oil shipments.
Russia had already threatened to retaliate by banning oil exports to countries that implement a price cap. The Nord Stream 1 pipeline has also been central to the ongoing economic conflict between Russia and the West.
Since June, Gazprom has slashed flows through Nord Stream 1 to just 20% of its capacity, citing maintenance issues and a dispute over a missing turbine caught up in Western export sanctions. It has also cut off supplies to several “unfriendly” European countries and energy companies over their refusal to pay for gas in rubles, as the Kremlin insists, rather than the euros or dollars stated in contracts. European leaders have described the demands as blackmail.
Earlier this week, Gazprom said it would suspend all shipments to France’s Engie (EGIEY) from Thursday, claiming that it had not received full payment from the company for the gas it supplied in July
Engie said the shutoff was the result of “a disagreement between the parties on the application of contracts.” Another cut to its gas supply is the last thing Europe needs as it heads into winter, when energy demand picks up. The bloc may have ramped up imports from alternate suppliers and already exceeded its storage target, but a further drop in supply could push wholesale gas prices, which feed into retail prices, even higher. Consumer price inflation across the 19 countries that use the euro hit 9.1% last month — its highest level in 25 years — according to an initial estimates by the EU statistics office. Energy prices were the single biggest driver of inflation, rising 38% in the year to August. But German Chancellor Olaf Scholz said earlier this week that his country was “much better prepared” to secure enough gas for the winter than could have been imagined a few months ago.