“No one canceled winter”: gas prices in Europe exceeded $2,000 per thousand cubic meters after Gazprom’s statements

On Tuesday, July 26, gas prices in Europe reached their highest level in almost five months.

During the auction, the cost of fuel at the TTF hub in the Netherlands rose by about 12.1% and for the first time since March 8 approached €198 per 1 MWh, or about $2,080 per 1,000 cubic meters.

m. This is evidenced by the data of the London Stock Exchange ICE.

Gas on the European market is rapidly rising in price for the second day in a row.

So, even the day before, quotes added about 10.5% after Gazprom announced plans to further reduce the pumping of raw materials through the Nord Stream pipeline.

From July 27, the company plans to stop the operation of another gas turbine engine at the Portovaya compressor station (CS) due to the end of the equipment's service life.

As a result, the daily output of Nord Stream will have to decrease from the current 67 million cubic meters.

m to 33 million (20% of the planned capacity of the gas pipeline).

“Europe is one of the largest consumers of Russian gas, and blue fuel from the Russian Federation accounts for a significant amount of global supplies.

Therefore, any statements by Gazprom are reflected in prices.

What can we say about the intention to reduce exports - this is very serious news for the EU, ”Artyom Deev, head of the analytical department at AMarkets, explained to RT.

A similar point of view was expressed by Natalya Milchakova, a leading analyst at Freedom Finance Investment Company.

According to her, European market participants are frightened by the prospects of a larger drop in supplies and the lack of affordable alternatives to Russian gas.

“Everyone understands that it is very difficult, if not impossible, to replace such a large supplier.

Limiting the supply of any resource leads to an increase in its price, so the situation with the rise in gas prices in Europe is quite a market one,” Milchakova explained.

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• © Stefan Sauer/picture alliance

Recall that gas via Nord Stream is supplied directly from Russia to Germany, from where it is then transported to other EU countries.

Located in the Leningrad Region, the Portovaya CS serves as the entry point to the pipeline.

In normal mode, it operates several gas compressor units (GPU) of different capacities based on turbines manufactured by the German company Siemens.

In June, the productivity of the Portovaya CS fell by almost 2.5 times, from the planned volume of 167 million cubic meters.

m per day up to 67 million cubic meters.

m (40% of the total capacity).

As Gazprom explained, a part of the GPU had expired and they were stopped.

At the same time, Siemens did not return one of the turbines for Nord Stream after repair due to anti-Russian sanctions from Canada, as a result of which the maintenance of other GCUs became impossible.

Although Germany initially considered Gazprom's explanations far-fetched, Berlin later turned to Canada with a request to bring equipment.

After several rounds of negotiations, Ottawa eventually agreed to temporarily lift some of the restrictions on Moscow and send the turbine.

At the moment, the engine is on its way to Russia; on July 25, Gazprom received the relevant documents.

At the same time, according to the company, the received papers do not remove the previously identified risks and raise a number of questions.

“There are still open questions about EU and UK sanctions, the solution of which is important for the delivery of the engine to Russia and the urgent overhaul of other gas turbine engines for the Portovaya CS,” the organization explained.

In these circumstances, Gazprom once again asked Siemens for the necessary documents, along with clarifications on still open issues.

As Russian President Vladimir Putin previously stated, the lack of official papers that would confirm the lifting of sanctions and the reliability of the use of the turbine makes it impossible to operate the equipment.

“We must understand what Gazprom is taking: in what condition the car arrived and what is its legal status - it is under sanctions, not under sanctions, what to do with it.

Tomorrow, maybe they will take her back,” the head of state explained.

According to him, if the necessary documents are received, the turbine can be installed and the daily output of Nord Stream will return to the level of about 60 million cubic meters.

m. Otherwise, the pumping will remain at the level of 30 million cubic meters.

m per day, the Russian leader emphasized.

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• © Alexander Zemlianichenko Jr

As Natalya Milchakova explained, at the moment it is not clear where Gazprom can now repair turbines in order to avoid sanctions and difficulties with further transportation of equipment when new repairs are needed.

A clear answer to this question should be given not only by Siemens, but also by the European Commission itself, which deals with sanctions, the analyst believes.

“Gazprom, in turn, is currently shutting down other gas compressor units for a scheduled inspection in order to find out and determine in advance whether these turbines need repairs or can still be done without.

The reasons are, of course, technical.

It’s just that with such a price and speculative hype, they are perceived by the market as fundamental,” Milchakova added.

“It will be difficult to survive in the winter”

Against the backdrop of the current situation, the European authorities doubt that they will have time to increase the volume of gas reserves to the required level by the beginning of the heating season.

Such concerns, for example, were expressed by the head of the Federal Network Agency of Germany, Klaus Müller, as reported by TASS.

According to him, the German regulator planned to increase the occupancy of its gas storage facilities from the current 65.9% to 90-95% by November 1, 2022.

However, even with the performance of Nord Stream at the level of 40%, Berlin would be able to provide reserves only 80-85% of the maximum possible, Muller believes.

Moreover, at the moment, the EU leadership fears a complete cessation of Russian gas supplies and urges the countries of the association to reduce the consumption of raw materials by 15%.

This was previously stated by the President of the European Commission Ursula von der Leyen.

“It is important that all member states reduce their consumption so that everyone saves more and shares it (gas. -

) with those members that have suffered the most.

Energy solidarity is the main principle of European treaties," TASS quotes the head of the EC.

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• © Future Image

It is curious that initially a number of European states opposed this initiative.

In particular, the authorities of France, Italy, Spain, Greece and Portugal expressed their disagreement with the EC proposal.

However, on July 26, the Council of the European Union agreed on a plan to reduce gas consumption by 15%.

Although the approved document provides for a number of exceptions for the EU countries, it will be difficult to physically implement the initiative, experts are sure.

According to Natalia Milchakova, not all states of the association are ready to actually implement the decree of the European Council.

At the same time, the demand for Russian gas is only increasing at the moment, which complicates the situation, added Gleb Finkelshtein, a specialist in the strategic research department at Total Research.

“The plan is extremely difficult to implement and has already encountered a lot of difficulties.

The south of Europe strongly opposed the initiative, and Poland refused to distribute gas at all according to the scheme presented by the European Commission.

Meanwhile, electricity is now very much needed for the production and operation of utilities, and due to the abnormal heat, it is being spent much more than planned.

So it will be very difficult for Europe to survive the winter without Russian gas, ”the source explained to RT.

In an attempt to punish Moscow with sanctions, Europe has endangered its huge industry and developed agriculture, said Deputy Chairman of the Russian Security Council Dmitry Medvedev.

According to him, at the same time, the EU authorities "spit on their own citizens" who want to live in warm houses with water.

However, now the European leadership is beginning to realize the consequences of its own actions, the deputy chairman of the Security Council believes.

“Then they realized it ... They remembered that no one canceled the winter, and alternative supplies of gas, oil and coal are expensive or simply unrealistic.

Realized how difficult it is to sit on three chairs.

Like, we help Ukraine and harm Russia, but our own economy and people are also not strangers.

In general, it didn’t work out beautifully,” Medvedev added.