“They are not interested in the consequences”: how Berlin’s refusal to launch the Nord Stream 2 working thread could threaten the EU

On Thursday, October 27, gas prices in Europe show mixed dynamics.

In the first half of the day, the cost of raw materials at the TTF hub in the Netherlands fell by 7.8% to €96.14 per 1 MWh, or about $995 per 1,000 cubic meters.

m, but after that the quotes rose to €110 per 1 MWh, or about $1,140 per 1,000 cubic meters.

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

Nevertheless, gas prices in Europe have more than doubled since the beginning of autumn.

As Igor Galaktionov, an expert on the BCS World of Investments stock market, explained to RT, one of the reasons for the observed dynamics was the accelerated filling of underground gas storage facilities by the countries of the region.

Thus, according to the Gas Infrastructure Association of Europe (GIE), today the EU reserves are provided with fuel by a total of 93.84%, and in a number of EU states the corresponding value has already exceeded 97-99%.

Earlier, the European Parliament planned to bring the figure to at least 80-85% by November 1.

“The storage facilities are almost full, and energy consumption is still relatively low.

The key factor now is a warm autumn.

The temperature regime is conducive to low demand for both heating and air conditioning,” explained Igor Galaktionov.

However, even filling storage facilities ahead of the heating season is unlikely to allow Europe to avoid problems with gas in winter.

This conclusion was made by experts from the American Institute of International Finance (IIF).

As noted in the organization, although energy prices are now continuing to decline, there is practically nowhere for the EU countries to store new volumes of fuel.

“The collapse of gas prices in Europe is not connected with an excess of its supply, but with a lack of storage space.

Falling gas prices - spot and annual futures - will not ease the situation either in February or next winter,” Robin Brooks, chief economist at the IIF, tweeted.

World Bank analysts also warn about possible threats to the EU energy market in winter.

According to experts, at the moment it is impossible to say unequivocally whether Europe will have enough raw materials in the coming months or not.

“This (filling storage facilities. -

) is good news, but the risk for Europe remains high, since it all depends on how severe the winter will be on the continent.

If it is soft, everything will be fine, but if it is very cold, the Europeans will have to impose restrictions on energy consumption, ”said John Buffs, the organization’s lead economist.

According to him, Europe today is in a difficult position as a result of problems with the supply of raw materials from Russia.

Although the UGS facilities of the EU countries are now almost completely provided with gas, the current volumes can be enough for only a few months, as the head of Gazprom, Alexei Miller, said earlier.

As an example, the top manager cited the situation with fuel consumption in Germany, the country with the largest underground storage facilities.

“The volume (of German gas storages. -

) is 21.5 billion cubic meters with 100% injection.

m of gas.

Germany is likely to pump about 20 billion cubic meters. According to estimates, which are based on historical data, Germany will consume 60 billion cubic meters over the coming autumn-winter period.

m of gas, maybe a little more ... This means that gas in underground storage facilities in Germany is enough for two, maximum two and a half months, ”Miller explained.

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• © Jean-Francois Badias

As Aleksey Fedorov, an analyst at TeleTrade, suggested in a conversation with RT, weather conditions in Europe may change as early as November, as a result of which the demand for energy will increase, and gas will begin to rise in price again.

At the same time, a more serious growth in quotations can be observed in January-February 2023, the specialist believes.

According to Alexey Miller, the situation will largely depend on the passage of the winter peak in the EU.

“Returning to the question of whether Europe will survive (winter. -

) with the volume of gas pumped into underground storage facilities that it has today or not.

The answer is very simple - no one can give any guarantees, ”Miller emphasized.

Relations - trumpet

At the moment, natural gas supplies from Russia to Europe have decreased by more than 80% compared to 2021 levels.

This is stated in the materials of the International Monetary Fund (IMF).

So, this year, the pumping of Russian gas through the Yamal-Europe pipeline was completely stopped due to restrictions from Poland.

At the same time, Ukraine halved the transit of fuel from Russia to the EU through its territory.

Moreover, at the end of September, a series of explosions occurred on both branches of the Nord Stream 1 gas pipeline and on one of the two branches of Nord Stream 2, and the transportation of raw materials along these highways became impossible.

As a result, among the pipelines oriented towards Europe, only Turkish Stream is currently operating at full capacity.

However, this trunk system is designed mainly for the southern countries of the EU and allows only 16 billion cubic meters to be pumped.

m per year, while, for example, about 110 billion cubic meters could be transported through Nord Stream annually.

m.

It should be noted that Nord Stream 1 started operating in 2011.

The construction of Nord Stream 2 was completed only in September 2021, but the gas pipeline was never put into operation because it was not certified for political reasons.

According to the Russian Foreign Intelligence Service, circumstantial evidence points to the involvement of the West in the sabotage that occurred in September on both pipelines.

At the same time, Russia was not allowed to investigate the circumstances of the terrorist attack, but even under these conditions, Moscow declared its readiness to supply gas to Europe through the surviving Nord Stream 2 line.

As President Vladimir Putin noted earlier, the Russian side does not yet have accurate information about the state of this highway.

On October 27, a specially equipped vessel, chartered by the Nord Stream AG gas pipeline operator, arrived at the site of the Nord Stream damage.

Now experts are waiting for permission from the Danish authorities to carry out work to assess the damage.

At the same time, according to Gazprom, the pressure in the surviving pipe is maintained, which means that it is in working condition.

“Its capacity is 27.5 billion cubic meters.

m per year, which is about 8% of all gas imports in Europe.

Russia is ready to start such deliveries.

The ball, as they say, is on the side of the European Union.

If they want, let them just open the tap, and that's it.

We ... do not limit anyone in anything, including being ready to supply additional volumes in the autumn-winter period, ”Putin said on October 12 at the Russian Energy Week forum.

Alexey Miller expressed a similar position.

According to him, if the pipeline is certified, gas supplies can be started immediately.

However, the final decision depends on Germany, said the top manager.

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• © Swedish Coast Guard / Handout/Anadolu Agency

Meanwhile, Berlin is rejecting proposals to launch the Nord Stream 2 working thread, since its use allegedly became impossible after the explosions.

This was reported on October 27 by the German government, writes Spiegel.

“It is very likely that the sabotage with strong explosions had a negative impact on both threads (gas pipelines. -

), and thus, at present, the technical possibility of using, in principle, is no longer available,” the German Cabinet said.

According to Igor Galaktionov, Germany's refusal to launch Nord Stream 2 is purely political.

A similar opinion is shared by Alexei Fedorov.

“Nothing has fundamentally changed for the German authorities.

Just as at the beginning of 2022 the decision to delay the certification of Nord Stream 2 was politically motivated, so now, by the end of the year, the German leadership continues the same line.

In this case, they are not very interested in the economic consequences for their own country, otherwise SP-2 would have started working in the spring, ”Fyodorov emphasized.

According to him, Germany and the European Union as a whole no longer make independent decisions and coordinate all their actions with Washington.

The United States, in turn, took advantage of the conflict in Ukraine to oust Russia from the EU energy market and break the strategic relationship between Moscow and Berlin in the gas industry, the expert added.

“Thus, the issue of launching SP-2 is not being decided in Germany now, and even more so, it is not related to the technical condition of the pipeline, at least as long as the course of the conflict in Ukraine leaves chances for the United States to maintain a dominant influence in EU policy. .

Therefore, as long as pro-American, and not pro-German, politicians remain in power in Germany, their economy will continue to slide into a deep hole, ”explained Alexei Fedorov.

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• © Davide Bonaldo/SOPA Images/LightRocket

American Friendship

According to the European Commission, since the beginning of 2022, Russia's share in the EU gas market has decreased from 40% to 7.5%.

As Igor Galaktionov noted, against the backdrop of falling supplies of raw materials from the Russian Federation, the only way for Europe to “block the hole” in its energy balance is to increase purchases of liquefied natural gas, primarily from the United States.

Meanwhile, the United States is selling its LNG to EU countries at inflated prices, which has already begun to raise questions from the European leadership.

For example, French President Emmanuel Macron previously expressed his dissatisfaction with Washington's energy policy, writes TASS.

“American gas is three to four times cheaper on the domestic market than the price at which it is offered to be purchased by Europeans.

These are double standards… I intend to raise this issue during my visit to the US in December,” Macron said on October 21.

However, at the moment Europe has no other options to replace Russian gas, experts say.

At the same time, as analysts believe, even purchases of American LNG will not be able to fully satisfy all the EU's energy needs.

“As for the impact of the current situation on the cost of gas in the EU, by January-February, exchange prices will return to at least $1.7-1.8 thousand per 1 thousand cubic meters.

m. If, however, weather and infrastructure force majeure is added to this, then the rise in quotations above $3 thousand per 1 thousand cubic meters is not excluded.

m,” says Alexey Fedorov.

In his opinion, this state of affairs runs the risk of turning into an even more serious acceleration of inflation in the EU, which has already approached 11% - for the first time ever.

Under such a scenario, Europe's GDP could shrink by 5-10%, the analyst added.