Germany raises alert level against Russia’s gas destruction

Germany said Moscow’s decision to raise the level of caution against Russia’s gas supply turmoil and weaponize energy exports put Europe’s largest economy in a “gas crisis.”

Berlin launched the second phase of its national gas emergency program on Thursday, nine days after Russia cut its gas supply through the Nord Stream 1 pipeline under the Baltic Sea by 60%. The third highest stage of the national gas program is the “urgent” level.

“We are in a gas crisis,” said Minister of Economy, Trade and Industry Robert Habeck. “From now on, gas is a rare commodity …. Prices are already high and we need to prepare for further increases. It affects industrial production and puts a heavy burden on consumers. It is an external shock. Harbeck said the gas had been deployed “as a weapon against Germany.”

The move to the second phase of the plan shows that authorities are aware of a “significant deterioration in gas supply conditions”, but the market can deal with it without resorting to “non-market-based measures”. Triggering the second stage does not allocate gas to industrial customers.

The government also said it would not enact a law allowing energy companies to pass on soaring costs to their customers after opposition to measures from the industry.

Futures contracts related to TTF, the European wholesale gas price, rose 4.7% Thursday morning to € 132.25 per MW.

Germany’s gas storage facility is now 58% full, higher than this time last year, but Habeck cannot meet its goal of storing up to 90% capacity if gas supplies remain at current low levels. Said. December unless additional measures are taken.

Gas importers are forced to make up for the shortage of gas supplied through NordStream1 by buying gas at much higher prices in the spot market.

Habeck said a few days before Russian gas giant Gazprom plans to carry out annual maintenance on Nord Stream 1, a move to shut down supply through the pipeline.

Authorities are concerned that Gazprom could shut down gas supplies altogether while NS1 is closed for repairs. “The supply situation is tight enough without the NS1 being shut down,” one said.

Carsten Rolle of BDI, the German business federation, is deficient by sending more gas to Germany via Ukraine or via the Yamal Europe pipeline via Poland during the previous period of scheduled maintenance of the NS1 Gazprom. Said that it supplemented.

“But there are concerns that they won’t do it this year,” he said. “We have already reduced the flow through NS1 by 60% and have not compensated for it with an increase in the flow through other pipelines.”

Markus Krebber, CEO of German energy company RWE, said it was “very clear” that the decision to reduce gas flow was “political.” [gas] Comes via Nord Stream 1 [is] It’s below the contracted volume, but it’s also via other pipelines. “

Gazprom could also use NS1’s planned maintenance “as an excuse to shut down gas supplies for much longer for a variety of technical reasons,” Roll said.

“What is the guarantee that the gas will actually come back at the end of the maintenance period?” Said James Waddell, an analyst at Energy Aspects.

So far, gas consumption during the summer is only one-fourth or one-fifth of the amount on cold winter days, so a reduction in flow through NS1 has a most specific impact on Germany’s supply. Is not given. However, it has serious implications for efforts to fill gas storage facilities prior to the winter heating season.

Jörg Demus, Head of Energy for the German Chemical Industry Association, said: “And Bundesnetz agentur [federal energy regulator] You need to place an order with a company to reduce gas consumption or to switch off some production facilities. “

Additional reports by David Shepherd and Joe Miller

Germany raises alert level against Russia’s gas destruction

Source link Germany raises alert level against Russia’s gas destruction

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