London (CNN Enterprise) — Russia won’t instantly resume pure gasoline exports to Europe by means of its Nord Stream 1 pipeline, worsening a scarcity that threatens to plunge the continent into an power disaster this winter.
On Friday, Russian state-owned power big Gazprom mentioned it could not resume flows by means of the pipeline on Saturday, as deliberate, as a result of it had detected an oil leak at its Portovaya compression station. The pipeline has been closed since Wednesday for upkeep.
The corporate didn’t give an estimate of when exports may resume.
“Till gear malfunctions are resolved, gasoline provide to the Nord Stream pipeline has been fully stopped,” Gazprom mentioned in a press release.
The Nord Stream 1 pipeline is a key artery transporting Russia’s huge gasoline provides to Europe, accounting for round 35% of Europe’s complete Russian gasoline imports final yr.
The gasoline goes on to Germany, the bloc’s largest financial system, which depends closely on gasoline from Moscow to energy its properties and heavy business.
However Russia has been in an power battle with Europe because it invaded Ukraine in late February.
The information of the prolonged shutdown comes on the identical day that main Western economies agreed to place a worth cap on Russian oil in an try to restrict Moscow’s potential to finance its conflict, whereas retaining a verify on the world inflation. This might result in nations blocking insurance coverage protection or financing of oil shipments.
Russia had already threatened to retaliate by banning oil exports to nations that apply a worth cap.
The Nord Stream 1 pipeline has additionally been instrumental within the present financial battle between Russia and the West.
Since June, Gazprom has diminished flows by means of Nord Stream 1 to simply 20% of capability, citing upkeep issues and a dispute over a misplaced turbine affected by Western export sanctions.
Russia additionally reduce provides to a number of European nations and “unfriendly” power corporations for his or her refusal to pay gas in rubles, because the Kremlin insists, as an alternative of the euros or {dollars} listed within the contracts. European leaders have known as these calls for blackmail.
Earlier this week, Gazprom mentioned it could droop all shipments to France’s Engie from Thursday, saying it had not obtained full cost from the corporate for gasoline it provided in July.
Engie mentioned the reduce was the results of “a disagreement between the events on the applying of the contracts.”
One other reduce within the gasoline provide is the very last thing Europe wants within the face of winter, when the demand for power will increase.
The bloc has elevated imports from different suppliers and has already exceeded its storage goal, however an additional drop in provide might push wholesale gasoline costs additional greater, fueling retail costs.
Shopper worth inflation within the 9 nations that use the euro hit 9.1% final month, its highest stage in 25 years, in accordance with first estimates from the European Union’s statistical workplace.
Power costs had been the primary driver of inflation, rising 38% within the yr to August.
However German Chancellor Olaf Scholz declared earlier this week that his nation was “significantly better ready” to safe sufficient gasoline for the winter than might have been imagined a number of months in the past.
“We are able to deal fairly properly with the threats that come to us from Russia,” he mentioned.
— Alex Stambaugh, Julia Horowitz, Michelle Toh, Eyad Kourdi, Rob North and Inke Kappeler contributed reporting.
