Nord Stream 1 pipeline to shut for three days in latest fuel blow to Europe



* Pipeline to halt Aug. 31-Sept. 2 for maintenance

* Disclosure comes as gas flows are down to 20%

* Move increases Europe, Moscow's energy standoff

By Christoph Steitz and Thomas Escritt

FRANKFURT/BERLIN, Aug 19 (Reuters) - Russia will halt natural gas supplies to Europe for three days at the end of the month via its main pipeline into the region, state energy giant Gazprom GAZP.MM said on Friday, piling pressure on the region as it seeks to refuel ahead of winter.

The unscheduled maintenance on the Nord Stream 1 pipeline, which runs under the Baltic Sea to Germany, deepens an energy standoff between Moscow and Brussels which has already helped send inflation surging in the region and raised the risk of rationing and recession.

Gazprom said the shutdown was because the pipeline's only remaining compressor requires maintenance. Gas flows via other pipeline routes also have fallen since Russia invaded Ukraine in February, in which Moscow calls a "special military operation."

The move will bring further disruption particularly for Germany, which depends largely on deliveries from Moscow to power its industry. The European Union has accused Russia of using energy as a weapon. Moscow has denied the charge and has blamed sanctions for the drop in exports.

"We are monitoring the situation closely with the Federal Network Agency," a spokesperson for Germany's economy ministry said. The Biden administration did not immediate respond to requests for comment.

The shutdown, to run from Aug. 31-Sept. 2, follows a 10-day maintenance curtailment in July, and raised fears over whether Russia would resume supplies, which have been reduced since mid-June.

Ukraine's gas transmission system operator said it and the Polish gas pipeline system have the capacity to compensate for the Nord Stream halt, and allow Russian gas to reach Europe.

Germany has had to give Uniper UN01.DE - its largest importer of Russian gas and the highest-profile corporate victim of Europe's energy crisis so far - a 15 billion euro ($15.1 billion) bailout after Russia drastically cut flows, forcing it to buy gas elsewhere at much higher prices.

The broader Germany economic impact was highlighted in producer price data on Friday, which in July saw their highest ever increases, both year-on-year and month-on-month, as energy costs skyrocket.

The Nord Stream pipeline had already been running at just a fifth of its capacity, stoking fears that Russia could halt flows completely heading into the winter heating season and make it more difficult to fill up storage facilities.

Before Gazprom announced the shutdown, gas prices in Europe TRNLTTFMc1 remained close to five-month highs, while U.S. gas prices NGc1 reversed course and settled up 1.2% following the news.

GERMAN DEPENDENCE

Germany has made targeted efforts to fill up its storage facilities to prepare for winter with levels standing at 78% as of Aug. 17, slightly more than the about 76% for the European Union as a whole.

After maintenance is complete, and "in the absence of technical malfunctions," flows of 33 million cubic metres (mcm) a day - in line with current volumes - will resume, Gazprom said.

The restart volume would be just 20% of Nord Stream's full capacity of 167 mcm daily.

Gazprom said maintenance work at the remaining Trent 60 gas compressor station would be carried out together with Siemens Energy ENR1n.DE . The Russian firm previously blamed faulty or delayed equipment for lower flows. Germany says this is a pretext to hurt its economy.

Siemens, which is in charge of maintaining the Nord Stream 1 turbines, declined to comment.

One of the Nord Stream 1 turbines is stuck in Germany after undergoing maintenance in Canada. Germany has said it could be transported but Moscow keeps saying that sanctions have prevented the equipment from being shipped back to Russia.

Earlier, senior German politicians had rejected suggestions that gas shortages could be alleviated by allowing the suspended Nord Stream 2 pipeline to go into service, something the Kremlin has suggested as a solution.

"I strongly suggest we spare ourselves the humiliation of always asking (Russian President Vladimir) Putin for something that we're not going to get," said Kevin Kuehnert, number two official in Chancellor Olaf Scholz's Social Democrats.

"The dependence on him has to end for once and all," he added in an interview with website t-online.

($1 = 0.9958 euros)



FACTBOX-Germany's efforts to tackle energy crisis

ID:nL8N2ZU4FB EXPLAINER-Could Germany keep its nuclear plants running?

ID:nL1N2ZU0XH FACTBOX-Nord Stream's role in Russia's gas supply to Europe ID:nL8N2YZ3W6



Reporting by Christoph Steitz and Thomas Escritt; Editing by Kirsten Donovan, David Holmes and Marguerita Choy

Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.

All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.

Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.

We are using cookies to give you the best experience on our website. Read more or change your cookie settings.

Risk Warning: Your capital is at risk. Leveraged products may not be suitable for everyone. Please consider our Risk Disclosure.