July 21, 2024

Russia’s national oil company, Gazprom shuts down Nord stream gas supply to Europe indefinitely

Oredola Adeola

Russian energy giant. Gazprom has announced the suspension of natural gas supplies to the EU via the Nord Stream 1 pipeline, for an indefinite period, due to technical malfunctions( equipment issues).

The Russian oil firm made this announcement on Friday, citing a gas pipeline leak, but however, refused to give an accurate time frame on when it would restart the pipeline.

EnergyDay gathered that the affected pipeline supplies gas to Western Europe (Germany).

Gazprom said a leak was detected in a turbine at the Portovaya compressor station near Vyborg outside St. Petersburg, Russia

The Russian national oil company in a statement on Friday said supplies would remain halted through Saturday after the leak was detected. The energy giant said the pipeline would not restart until repairs were fully implemented.

It said, “The leak was found at the main gas turbine at the Portovaya compressor station near St Petersburg.

The Russian Oil company had earlier on August 19, revealed that it would stop the flow of gas through the pipeline from August 31 until September 2 due to routine maintenance.

The Russian Government had blamed Western a wide range of sanctions due to its invasion of Ukraine.

Some of the sanctions include the decision of the  United States to bar Russia from making debt payments using the $600m it holds in US banks. This has therefore made it harder for Russia to repay its international loans. The US banned  all Russian oil and gas imports

The UK has excluded key Russian banks from the UK financial system, frozen the assets of all Russian banks, barred Russian firms from borrowing money, and placed limits on deposits Russians can make at UK banks. The UK will phase out Russian oil imports by the end of 2022

The European Union (EU) says it will ban all imports of oil brought in by sea from Russia by the end of 2022. The EU The EU said it will halt Russian coal imports by August

Germany has frozen plans for the opening of a major gas pipeline from Russia

Klaus Mueller,  President of the Bundesnetzagentur, Germany’s gas regulator, in reaction to the supply cut said, “For the time being, the LNG terminals, the relevant storage levels & significant savings requirements are becoming more important.

“It’s good that Germany is now better prepared, but now it’s down to each and everyone.”

A spokesperson for Germany’s Economy Minister noted, “We have seen Russia’s unreliability in past weeks and so have continued to take measures to reinforce our independence from Russian energy imports,”

Last month, Robert Habeck, Germany’s Economy Minister, said, “They don’t even have the guts to say ‘we are in an economic war with you.'”

Gas prices in Europe have soared, harming households and industry alike.

While European Commission head Ursula von der Leyen has argued in support of price caps on Russian gas to Europe as a result, Moscow has pushed back arguing that would be sufficient cause to halt sales to Europe altogether.

“We see that the electricity market does not work anymore. because it is massively disrupted due to Putin’s manipulations,” she said.

IMPACT ON THE GLOBAL MARKET

EnergyDay’s check showed that the outlook for crude oil and gas markets remains uncertain due to Russia’s Invasion of Ukraine and sanctions imposed on Russia by Western countries.

Nigeria is likely to gain immensely from the shutdown as the EU and UK have, in recent times, approached Nigeria seeking to increase supply of Liquified Natural Gas(LNG) to above the current 14 per cent as a result of shortage in gas supplies.

The sanctions have threatened to disrupt the crude oil supply, as Nigeria and other members of the Organisation of Petroleum Exporting Countries (OPEC) have been struggling to increase production quotas.

Nigeria’s crude oil production has significantly dropped to 1.024 million barrels per day due to persistent oil theft, pipeline vandalism, aging infrastructure, organised crime and other technical issues.

 

 

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