Page 11 - FSUOGM Week 35 2022

FSUOGM PERFORMANCE FSUOGM

European gas prices continue to

outstrip previous peaks

EUROPE EUROPEAN natural gas prices saw sus- Nord Stream 1 at all after the three-day main-
tained and significant growth over the week tenance period ends. The company has already
Nord Stream is offline ending August 26, as the market prepares for noted that it will only restore supplies if there is
for three days of the full closure of the Nord Stream 1 pipeline the “absence of technical malfunctions” at the
maintenance. at the end of the month for three days for last remaining turbine in use at Portovaya.
maintenance. Disruptions in Russian gas supply have com-
The October contract at the leading TTF gas bined with the effects of a summer heatwave
hub in the Netherlands reached a new height of to drive up gas prices over recent weeks and
€339 per MWh, or around $3,600 per 1,000 cubic months. This heatwave has not only driven up
metres, on August 26, up from €321 per MWh on demand for air cooling systems, at a time when
the previous day of trading and €277 per MWh at the EU is trying to get energy users to conserve
the start of the week. Gazprom had announced supply for winter, but has also led to droughts
at the end of the previous week that the Nord across Europe, limiting hydroelectric power gen-
Stream 1 pipeline would be closed down between eration and causing problems with the transport
August 31 and September 2. After the mainte- of energy commodities such as coal along rivers.
nance is done, the company said that the pipe- The EU is due to convene another emergency
line’s flow rate would be restored to 33mn cubic meeting of energy prices in the coming days.
metres per day – equal to only a fifth of its full Czech Prime Minister Petr Fiala announced on
capacity and in line with the current rate. August 26 that the Czech Republic, the current
Gazprom has said that Western sanctions holder of the rotating European Council pres-
have complicated the repair and maintenance idency, would summon ministers “to discuss
of equipment at the Portovaya compressor sta- specific emergency measures to address the
tion that handles Nord Stream 1’s gas. Namely energy situation,” while Czech Trade Minister
this relates to the repair of Siemens turbines. One Jozef Sikela said they should meet “at the earliest
such turbine was returned from repair in Canada possible date.”
earlier this summer after authorities in Ottawa The spike in gas prices has hit the fertiliser
granted a sanctions exemption, but it remains industry hard, risking exacerbating the emerging
stranded in a port in Germany awaiting transfer global food crisis. Also on August 26, Europe’s
to Russia. Gazprom has said that it needs paper- fertiliser industry association warned that 70%
work and further assurances to allow its return of production in Europe had been curtailed in
to Russia. response to soaring gas prices. The companies
In a further development, the Canadian that have shut down or reduced output include
government confirmed last week that it would Norway’s Yara, Germany’s BASF and Poland’s
permit the maintenance of all of the five turbines Grupa Azoty.
used at Portovaya, at the request of Germany. The EU has called on all member states to
“That’s exactly what Germany has asked us,” introduce a 15% voluntary reduction in national
Canadian Foreign Minister Melanie Joly told gas consumption between this month and the
the CBC on August 24. “Canada doesn’t want end of the winter heating season, and this cut
to give any form of excuse to [Russian President could become mandatory if the European Com-
Vladimir] Putin to continue to weaponise his mission agrees with national governments that
flow of energy to Europe.” such a move is necessary. However, the legisla-
The fear among European governments is tion lacks teeth, as many member states would
that Gazprom may not resume gas flows via be able to secure exemptions. ™

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