Page 6 - FSUOGM Week 28 2022

FSUOGM COMMENTARY FSUOGM

What if Nord Stream 1 doesn’t come back

online?

Europe can handle Nord Stream 1's closure, but not a full cut-off in Russian gas

supply.

RUSSIA THE Nord Stream 1 pipeline closed down on If Nord Stream 1 remains closed, Russia’s
July 11 for routine maintenance that was planned transport capacity would be sufficient to main-
well in advance, and which takes place every tain supply at the current low rate. It can send
WHAT: summer. While under normal circumstances up to 33 bcm per year of gas to Europe via the
There are fears Russia the 10-day closure would be no cause for alarm, Yamal-Europe pipeline that runs through Bela-
could keep its Nord European officials have raised the possibility that rus and Poland to Germany, even though this
Stream 1 pipeline offline Moscow may keep the 55bn cubic metre per year link has mostly been flowing in reverse since the
for longer than the 10- pipeline offline for longer, in order to further end of last year, because of curtailments in Rus-
day maintenance period. destabilise European energy markets. sian gas supply.
The EU consumed 412 bcm of natural gas in The TurkStream under the Black Sea can
WHY: 2021, and Russia covered around 155 bcm of this carry an additional 31.5 bcm per year, with the
Russia has already demand, giving it a market share of just under pipeline once again fully operational following
curtailed gas supply 40%. However, due to Russia cutting supply off maintenance last month. However, one of the
to Europe significantly to a number of buyers earlier this year for fail- pipeline’s 15.75 bcm per year pipes is dedicated
since the war began, ing to comply with its rubles-for-gas decree, and to supplying the Turkish market.
in moves slammed as a curtailment in supply via Nord Stream 1 last Then there is Ukraine’s gas transit system, but
politically-motivated. month, June shipments slumped to a record low how much Russian gas it is capable of sending
of 4.7 bcm, or 56.4 bcm on an annual basis. In depends on who you ask. In May, Ukrainian gas
WHAT NEXT: comparison, deliveries in June last year totalled grid operator GTSOU suspended the flow of
There is enough transit 12 bcm. gas through its Sokranivka transit point, which
capacity along other The good news is that despite this reduction usually accounts for nearly a third of Russian gas
routes for Russia to in supply, Europe has so far managed to con- deliveries to Europe via Ukraine. But the oper-
divert flow. But Europe tinue increasing the amount of gas it has storage, ator said that these flows could be diverted to
would have no way of albeit at a slower rate than previously envisaged. the Sudzha interconnection point further west.
finding replacement Its underground storage facilities were filled to Gazprom said at the time that it would be “tech-
volumes in the event that 61.6% capacity as of June 9, which is close to the nologically impossible” to move all the volumes
Moscow cuts off supply average utilisation rate for this time of year over to the other route, however.
completely. the past decade. GTSOU’s CEO Sergiy Makogon told Reuters

P6 www. NEWSBASE .com Week 28 13•July•2022