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Germany Triggers Phase 2 Of Gas Emergency Plan

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Germany has triggered the second phase of its three-phase gas emergency plan as it braces up for the possibility of a complete halt of gas supplies from Russia via the Nord Stream 1 pipeline.

In an official statement, Economy Minister Robert Habeck said, as quoted by Reuters, that Germans would need to begin reducing their energy consumption and blamed the current state of affairs on Russia’s president.

Fear of supply outages in Germany is running high as Gazprom prepares for regular maintenance of Nord Stream 1. According to an FT report, Germany fears that the Russian state will “take advantage” of the maintenance work to suspend gas deliveries to its biggest European client.

Supply via the Nord Stream 1 pipe is already much lower than normal due to a delay in the installation of a  turbine that was taken by Siemens Energy for repairs to Canada, which recently extended sanctions against Russia to include services, effectively blocking the turbine.

The German government dismissed this explanation—provided by both Gazprom and Siemens Energy—saying the motive for the flow reduction was political.

“The supply situation is tight enough without NS1 being shut down,” one unnamed German government official told the FT.

Normally, when Gazprom does maintenance on Nord Stream 1, it diverts the gas supply to Ukrainian pipelines and Yamal-Europe, the FT quoted the head of Germany’s business confederation BDI as saying.

“But there is a concern that they will not do that this year,” Carsten Rolle told the FT. “Already they have cut flows through NS1 by 60 per cent and not made up for it with increased flows through other pipelines.”

As a result of lower gas supply, European prices are once again on a steady rise, with fears building that despite a strong start to storage-filling, the ending might be a lot slower ahead of the next heating season.

For Germany, the situation is especially sensitive. According to BDI, the German economy will undoubtedly slip into a recession if Russia closes the gas taps completely.

For now, the government is calling for energy conservation and reconsidering the use of its coal-fired power plants, like others in Europe, such as Austria and the Netherlands. Yet it remains adamant that the final year in which it will produce coal-fired power will be 2030.

By Irina Slav for Oilprice.com

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