Russia keeps traders guessing on Nord Stream gas pipeline’s return

Russia is keeping European natural gas traders on edge about the return of a key pipeline supplying the continent after maintenance ends next week. 

State-run energy giant Gazprom PJSC said on Twitter Wednesday that it doesn’t have any documents allowing Siemens Energy AG to move a crucial turbine for the Nord Stream link out of Canada, where it’s being serviced. 

The comments add to concerns in Europe – where energy markets are already tight – about the future of supplies from Russia amid tensions related to the war in Ukraine. Moscow has previously cut shipments to other European Union nations, and Nord Stream is the main gas artery to Germany, the bloc’s largest economy. 

Gazprom said “it appears impossible to reach an objective conclusion on further developments regarding the safe operation” of the Portovaya compressor station, which the company described as “critical” to Nord Stream.

Portovaya, the entry point for the link on the Russia side of the Baltic Sea, needs six major turbines for the pipeline to operate at full capacity. 

Canadian Maintenance

One component being serviced was stranded in Canada after the country-imposed sanctions on Russia for the invasion of Ukraine. Moreover, not all of the turbines in Russia are in working condition, according to Gazprom, since they are due for maintenance at manufacturer Siemens Energy’s facility in Montreal. 

Siemens Energy declined to comment.

As a result of the situation, Gazprom slashed supplies through Nord Stream to just 40 per cent of its capacity last month - before the link fully halted for planned annual maintenance on Monday. Concerns about its return next week have contributed to an increase in already elevated gas prices in Europe.

Last week, Germany asked Canada to release the equipment, and the Kremlin said its return would help increase the supply. The Canadian government has said it will handle all issues with Germany, since releasing the component to Russia is banned under sanctions. 

Ottawa issued a permit to export the sanctioned equipment to Germany, arguing the move will help shore up European energy security. The measure also extends to other Nord Stream turbines that will need maintenance in Canada. 

© 2022 Bloomberg L.P.

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