Zhitong Finance APP learned that Gazprom said that the Nord Stream 1 gas pipeline leading to Europe will not restart as planned. The pipe was scheduled to restart after repairs on Saturday, but the company claimed to have discovered a technical issue that the pipe could not run again until it was repaired. The EU said Gazprom's reason was "false excuses". Siemens Energy, which produces pipeline turbines, said the leak mentioned by Gazprom is not a reason to stop gas transmission.
This is a huge blow to Europe, which is currently striving to reduce its dependence on Russian gas before winter while waiting for Russia's next move in the energy war. Indefinitely shutting down pipelines has exacerbated the energy crisis, potentially leading to more economic unrest as Europe works to take steps to survive the winter.
The gas crisis is forcing European industries to shut down and weaken the euro as prices are four times higher than they were a year ago.
Hours after Gazprom's statement came out, the G7 said it planned to impose a price cap on global purchases of Russian oil.
Before the heating season arrived, Europe has been increasing its natural gas reserves. US Presidential Special Coordinator Amos Hochstein told the media that natural gas in Europe should reach 90-95% of its storage capacity, but it is obviously not yet met its target, and the United States will prioritize the sale of liquefied natural gas to Europe. The complete shutdown of supply of the Nord Stream pipeline from the Baltic Sea to Germany means only two main routes for transporting natural gas to the EU: one through Ukraine and the other through the Black Sea. The flow through Ukraine is also limited, but the TurkStream passing through the Black Sea is operating continuously.
Germany has relied on cheap Russian gas for decades and is currently working to adjust its energy policy in just a few weeks to protect the country's economy. German Economy Minister Habek said this week that the country cannot rely on Russian natural gas at all.
He noted: "We have seen Russia's unreliability over the past few weeks, so we have continued to take steps to get rid of our dependence on Russian energy."
The EU is considering unprecedented interventions in the energy market, including setting price caps, reducing electricity demand and imposing huge profit taxes. These discussions have suppressed gas prices this week.
In addition, the EU has been preparing for the interruption of Russian gas supply by replenishing reserves and importing liquefied natural gas from the United States.
Aurora Energy Research Senior Commodity Assistant Jacob Mandel said: "It is not easy for Europe to obtain natural gas, and it is becoming increasingly difficult to find alternatives to Russian gas. When the weather turns colder and demand for natural gas in Europe and Asia begins to rebound, there is not much liquefied natural gas available in Europe."
