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Shutdown for repairs to Russian Nord Stream 1 pipeline worries authorities

Ever since the West hit Russia with hard-hitting sanctions after the Ukraine invasion, a daunting question has arisen: what if Russia turns off natural gas for Europe?

It’s a nightmare scenario that would plunge the region’s economy into a deep recession.

This possibility is the subject of new concerns, as maintenance of the Nord Stream 1 pipeline from Russia to Germany began this Monday (11). Authorities have expressed concern about whether gas flows will restart once the repair period ends in 10 days.

“While this used to be a routine procedure that hardly attracted attention, it is feared this time that Russia will not resume gas shipments afterwards,” analysts at Commerzbank said in a note to clients.

Flows through the pipeline had already been reduced. Last month, Germany — Europe’s biggest economy — declared a “gas crisis” after Gazprom, Russia’s state-owned gas company, cut exports through Nord Stream 1 by 60%.

Gazprom blamed the West’s decision to withhold vital turbines because of sanctions, but it was seen by politicians in Europe as a warning shot.

“Anything could happen. It may be that the gas will flow again, even more than before. Maybe nothing will happen,” Robert Habeck, Germany’s economy minister, said Sunday in a radio interview.

“Honestly, we always have to prepare for the worst and work a little for the best.”

France’s finance minister also said on Sunday that the country must act quickly and efficiently to prepare for a “total cut of Russian gas”, although it is less reliant on gas as an energy source than Germany.

Nord Stream 1, which became operational in 2011, transports 55 billion cubic meters of gas a year to Europe via the Baltic Sea.

Typically, Gazprom handles the maintenance period by increasing supplies traveling to Europe via other pipelines or storage.

This time, the company said it’s not an option, according to S&P Global Commodity Insights.

Italian gas giant Eni said on Monday that it was told by Gazprom that it would start supplying 21 million cubic meters of gas a day. The average of the last few days was about 32 million cubic meters per day.

Europe is racing to get rid of Russian energy, but reducing dependence on gas is particularly difficult.

The region received 45% of its natural gas imports from Russia last year and is currently racing to replenish storage facilities before winter.

Berlin has activated the second phase of its three-stage gas emergency program. This takes one step closer to rationing supplies to industry participants, a step that would be a huge blow to the manufacturing heart of the country’s economy.

Consumers have been told to reduce demand as conservation efforts increase. Last week, Germany’s biggest landowner said he would reduce the heat for hundreds of thousands of residents in the coming months.

Reference prices for natural gas in Europe hit their highest level since March last week. They could continue to rise in the coming days, intensifying pressure on governments to develop contingency plans.

“Concerns are likely to drive the price of gas even higher until it becomes clear what will happen to the gas supply once the maintenance work is complete,” Commerzbank said.

— Chris Liakos contributed reporting.

Source: CNN Brasil

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