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2022-09-29 13:50:00

EUROPE NEED ENERGY SECURITY

EUROPE NEED ENERGY SECURITY

PLATTS - 28 Sep 2022 - The EU pledged Sept. 28 to strengthen its energy security following the damage caused to the Nord Stream and Nord Stream 2 pipeline systems, likely as a result of a "deliberate act".

EU High Representative Josep Borrell said the incidents on the two pipelines were "not a coincidence and affect us all".

"All available information indicates those leaks are the result of a deliberate act," Borrell said in a statement.

"We will support any investigation aimed at getting full clarity on what happened and why and will take further steps to increase our resilience in energy security."

"Any deliberate disruption of European energy infrastructure is utterly unacceptable and will be met with a robust and united response."

Despite the fact neither Nord Stream nor Nord Stream 2 were flowing gas to Europe at the time of the incidents, gas prices rose as much as 9% in early trading Sept. 27.

Prices surged again late in the day after Russia's Gazprom hinted that sanctions could be imposed against Ukraine's Naftogaz Ukrayiny, prompting new fears of a total halt in Russian gas flows via Ukraine.

Platts, part of S&P Global Commodity Insights, assessed the TTF month-ahead contract on Sept. 27 at Eur207/MWh ($198/MWh), up by 20% on the day.

European Commission President Ursula von der Leyen said it was "paramount" to investigate the incidents on the Nord Stream pipelines and get full clarity on the cause.

"Any deliberate disruption of active European energy infrastructure is unacceptable and will lead to the strongest possible response," von der Leyen said on Twitter.

EU Council President Charles Michel also called for an urgent and thorough investigation.

"Nord Stream sabotage acts appear to be an attempt to further destabilize energy supply to EU," Michel said on Twitter. "Those responsible will be held fully accountable and made to pay," he said.

'Strong assumption'

The operator of Nord Stream -- which was hit by two leaks on each of its two strings -- said late Sept. 27 that the significant pressure drop caused by the gas leak on both lines led to a "strong assumption" of pipeline physical damage.

"Nord Stream AG has started mobilization of all necessary resources for a survey campaign to assess the damages in cooperation exchange with relevant local authorities," it said.

"Currently, it is not possible to estimate a time frame for restoring the gas transport infrastructure. The causes of the incident will be clarified as a result of the investigation."

A full investigation is likely to be possible only after gas stops leaking out of the pipelines, which could take up to a week, according to reports.

There were also concerns that the two Nord Stream strings could be unusable indefinitely.

Polish Prime Minister Mateusz Morawiecki said Sept. 27 it was clear the leaks were the result of "an act of sabotage".

Kremlin spokesman Dmitry Peskov, meanwhile, dismissed accusations that Russia was behind the leaks on both Nord Stream pipelines as "absurd" but not a surprise.

"It is quite predictable, and it is also predictably stupid and absurd to express such versions," Peskov was quoted as saying Sept. 28 by Tass news agency.

Peskov said the incidents on the two pipelines represented a "big problem" for Moscow. "We have lost the gas supply route to Europe," he said, adding that the lost gas out of the Nord Stream 2 pipeline had been earmarked for domestic use.

Peskov said he looked forward to the results of investigations by Danish and Swedish authorities, adding that Russia would also insist on the participation of Gazprom in the probes as it is owner of the pipelines.

Supply impact

The fact that neither pipeline was operational at the time of the leaks -- despite being filled with gas -- meant there has been no immediate impact on gas supply to Europe.

"No gas has been supplied via Nord Stream since the beginning of September and Nord Stream 2 was never put into operation," Germany's energy regulator said Sept. 28.

It added that the German Federal Ministry of the Interior and Homeland, as the department responsible for questions of security and protection against sabotage, was in close contact with the German security authorities and with the Danish and Swedish partners about the events.

Nord Stream flows were halted on Aug. 31 and have not resumed operations since due to what Gazprom has described as maintenance issues with turbines at the Portovaya compressor station.

Nord Stream 2 never started commercial operations despite construction work on the two-string 55 Bcm/year pipeline being completed in September last year and the lines then being filled with some 350 million cu m of gas in late December.

Baltic Pipe

The leaks were detected just as the new Baltic Pipe from Norway to Poland via Denmark is due to begin operations. The Baltic Pipe crosses both the Nord Stream and Nord Stream 2 pipelines.

Morawiecki was clear in his assessment of the events on the two Nord Stream lines. "Today, we are dealing with an act of sabotage," he said at the opening ceremony of the Baltic Pipe on Sept. 27.

"We do not know all the details of what happened, but we see clearly that it is an act of sabotage related to the next step of escalation of the situation in Ukraine," he said.

Danish Prime Minister Mette Frederiksen, also speaking at the opening ceremony of Baltic Pipe, said improving European energy security was critical in light of the leaks.

"The very concerning events of yesterday, with leaks on Nord Stream and Nord Stream 2, highlights the urgency of increasing our energy security in Europe," Frederiksen said.

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Tags: EUROPE, RUSSIA, GAS, PRICES, NORD, STREAM