Page 4 - FSUOGM Week 39 2022
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FSUOGM                                        COMMENTARY                                            FSUOGM


       Sabotage suspected as





       gas leaks reported at





       both Nord Stream 1 and 2








       The pipelines suffered multiple leaks on the same day, and sabotage is widely suspected



        RUSSIA           NATURAL gas leaks have now been reported at  that Nord Stream 1 would return to operation
                         both Russia’s Nord Stream 1 and Nord Stream 2  helps explain why the market’s reaction to the
       WHAT:             pipelines, and while the reasons are unclear, the  leaks was mute. Futures contracts at the Dutch
       Three of the Nord Stream   fact that both pipelines should suffer such inci-  TTF hub rose by only around 5% at the market’s
       1 and 2 pipelines have   dents on the same day has prompted speculation  opening on September 27, reaching €183/MWh
       suffered leaks.   of sabotage.                         by around 08:30 GMT. This followed a decline of
                                                              around 6% on the previous day.
       WHY:              What we know
       Sabotage is the   The  Danish  Energy  Agency  (DEA)  reported  Causes?
       suspected cause.  on September 26 that it had been informed of  Gazprom has not commented on the matter.
                         a major drop in pressure at Nord Stream 2. The  However, Kremlin spokesman Dmitry Peskov
       WHAT NEXT:        agency said its “preliminary assessment indi-  told reporters on September 27 that sabotage
       Investigations are   cates that a leak has occurred from one of the  could not be ruled out. "No option can be ruled
       underway, but for the   two Nord Stream 2 pipelines in the Danish area  out right now," he said, according to Reuters,
       time being, information is   south-east of Dueodde at Bornholm … from  adding that Moscow was very concerned with
       limited.          where natural gas is leaking.” The Danish Mar-  the situation, which would need a prompt in-
                         itime Agency has told ships to avoid the area.  vestigations given the implications for the ener-
                         German authorities have also said they are in-  gy security of the "entire continent."
                         vestigating the issue.                 And there are no official claims that the pipe-
                           Nord Stream 2 was never brought into oper-  lines were sabotaged. However, a report by Ger-
                         ation, as Germany halted the pipeline’s certifi-  man media group Tagesspiegel cited sources as
                         cation process in late February in response to  saying that the government in Berlin was consid-
                         Russia’s actions in Ukraine, days before Moscow  ering sabotage as the likely cause.
                         launched its all-out invasion. The pipeline was   “We can’t imagine a scenario that isn’t a tar-
                         nevertheless filled with gas last year as part of  geted attack,” a source familiar with the federal
                         preparations for its launch.         government’s assessment said, according to the
                           Meanwhile, the Nord Stream 1 operat-  newspaper. “Everything speaks against a coin-
                         ing company said on September 26 that it had  cidence.” Significant gas leaks along pipelines
                         recorded a pressure drop, and was investigat-  are rare, especially for modern ones like Nord
                         ing the cause. In statements to Russian media  Stream 1 and 2. The two pipelines leave the Rus-
                         the following day, the operator said that the  sian shore at different points, using different
                         destruction caused to the pipeline system was  infrastructure, making it seemingly unlikely that
                         “unprecedented,” and that it was unclear how  a technical problem further up the gas stream
                         long it would take to fix. The Swedish Maritime  could have caused the simultaneous leakages.
                         Administration also confirmed on September 27   The incidents come after Russia’s security ser-
                         that leaks had occurred at Nord Stream 1 as well  vices notably claimed on September 22 that they
                         as Nord Stream 2.                    had successfully thwarted a planned Ukrainian
                           Nord Stream 1 indefinitely shut down gas  attack at an oil and gas infrastructure site that
                         flows on September 5, with Gazprom citing  supplies energy to Turkey and Europe. Ukraine
                         technical difficulties relating to problems get-  has denied this. Russian security services did not
                         ting equipment repaired overseas because of  specify which piece of infrastructure had been
                         Western sanctions. Gazprom had been curtail-  targeted, but the only route for Russian energy to
                         ing its gas flow since June, and before its closure,  both Turkey and Europe is the TurkStream pipe-
                         it was operating at only 20% of its 55 bcm per  line. Like Nord Stream 1 and 2, it was built largely
                         year capacity.                       to allow Russia to bypass the Ukrainian gas tran-
                           The fact that there was little expectation  sit system, reducing its reliance on Kyiv. ™



       P4                                       www. NEWSBASE .com                      Week 39   30•September•2022
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