Benchmark European gas prices soared as much as 12 per cent on the news and French year-ahead power jumped to a record. Europe is in the grips of its worst energy crisis in decades, and governments have been racing to fill gas storage sites ahead of winter. The supply crunch has seeped into the broader economy, contributing to concerns about a possible recession and raising the risk of gas rationing during the colder months.
A spokeswoman for Germany’s economy ministry said the government is “monitoring the situation very closely” together with the Federal Network Agency. “According to our information, there is no technical reason for a reduction in deliveries” of gas, the spokeswoman said by email.
Approval requirements for the delivery of the turbine in question had been met, she said, adding that Canada had granted the exemption needed under Canadian law and no exemption was required according to EU sanctions regulations.
President Vladimir Putin last week warned that Nord Stream flows could fall further if a spat over its turbines, which help pump gas through the network, isn’t resolved. The units, manufactured by Siemens Energy AG, need to go to Canada for maintenance, and sanctions-related delays threaten their timely return.
One turbine that was recently serviced is now stuck en route to Russia from Germany amid delays related to paperwork. The arrival of that component would allow flows at 40 per cent, Putin has said. Since only one turbine is now left in working condition in Russia, based on Gazprom’s statements, the part from Canada will be the second one. Normally, the station needs six major turbines.
Earlier Monday, Gazprom said there were still sanctions-related issues around the turbine now on its way back to Russia, even though Siemens had provided the company with some paperwork, as well as around the other units that need to be repaired. Siemens declined to comment.
The EU still relies on the little gas its getting from Russia to fill its winter stockpiles. Concerns about gas shortages have already spread to every market, with the European Commission calling on all member states to participate in the effort to save gas, regardless of how dependent they are on Russia for the fuel.
Despite the turbine spat, Russia is “not interested” in a complete cutoff of its gas deliveries to Europe, Kremlin spokesman Dmitry Peskov said earlier on Monday. However, “if Europe continues its course of absolutely recklessly imposing sanctions and restrictions that are hitting it, the situation may change,” he said.