Europe on edge over halt to pipeline gas flows

LONDON/FRANKFURT－The biggest single pipeline carrying Russian gas to Germany began annual maintenance on Monday, with flows expected to stop for 10 days. But governments, markets and companies are worried that the shutdown might be extended because of the conflict in Ukraine.

The Nord Stream 1 pipeline transports 55 billion cubic meters of gas a year from Russia to Germany under the Baltic Sea. Maintenance lasts from Monday to July 21.

Last month, Russia cut flows to 40 percent of the pipeline's capacity, citing the delayed return of equipment being serviced by Germany's Siemens Energy in Canada.

Canada said over the weekend that it would return a repaired turbine, but it also said it would expand sanctions against Russia's energy sector.

Europe fears Russia could extend scheduled maintenance to restrict European gas supply further, throwing plans to fill storage for winter into disarray and heightening a gas crisis that has prompted emergency measures from governments and painfully high bills for consumers.

German Economy Minister Robert Habeck said the country should confront the possibility that Russia will suspend gas flows through Nord Stream 1 beyond the scheduled maintenance period.

"Based on the pattern we've seen, it would not be very surprising now if some small, technical detail is found and then they could say 'now we can't turn it on any more'," he said during an event at the end of June.

Kremlin spokesman Dmitry Peskov dismissed claims that Russia was using oil and gas to exert political pressure, saying the maintenance shutdown was a regular and scheduled event.

Russia has cut off gas supplies to several European countries that did not comply with its demand for payment in roubles.

Recession warning

Germany welcomed Canada's decision over the weekend to issue a "time-limited and revocable permit" to allow equipment to be returned for Nord Stream 1.

Siemens Energy said it was working on further formal approvals and logistics to have the equipment in place as soon as possible.

In previous years, the annual maintenance period on Nord Stream 1 has lasted about 10 to 12 days and has finished on time.

Germany has moved to stage two of a three-tier emergency gas plan, which is one step before the government rations fuel consumption.

It has also warned of recession if Russian gas flows are halted. The blow to the economy could be 193 billion euros ($195 billion) in the second half of this year, showed data from the Bavarian Industry Association last month.

The effects would be wider still. A complete halt would keep European gas prices higher for longer, having already stung industries and households.

Wholesale Dutch gas prices, the European benchmark, have risen more than 400 percent since last July.

"If Nord Stream gets cut off, or if Germany loses all its Russian imports, then the effect will be felt on the whole of northwestern Europe," Dutch energy minister Rob Jetten said.

Agencies - Xinhua