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    European gas prices climb further after news of Nord Stream closure


The September contract spiked at €276/MWh ($2,940/'000 m3) during early trading on August 22, up 13% from the previous session.

by: NGW

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European gas prices climb further after news of Nord Stream closure

European gas prices climbed further on August 22, following Gazprom's announcement late at the end of the previous week that the Nord Stream 1 pipeline would be closed for three days of maintenance at the end of the month.

The only working compressor unit at Portovaya compressor station that handles Nord Stream 1's gas flow will be shut down between August 31 and September 2, so that joint maintenance can be carried out by specialists from Gazprom and Germany's Siemens, the Russian company said on its Telegram channel on August 19.  After the work is done, Nord Stream 1's supplies will be restored to the current level of 33mn m3/day, which represents only a fifth of the pipeline's capacity.

The September contract at the Dutch TTF hub spiked at 276/MWh ($2,940/'000 m3) during early trading on August 22, up 13% on the price in the previous trading session.

European authorities are on edge about the risk that Russia could halt gas flow to Europe entirely. Germany, which has been hit hard by the reductions in Nord Stream 1's gas flow already, has urged consumers to conserve gas.

However, while Germany's government has restored some coal-fired power generation to save gas, economy minister Robert Habeck on August 21 ruled out extending the lifespan of the country's three remaining nuclear power plants, due to be retired at the end of this month, estimating that at best doing so would only save 2% of the gas use. The stations have a combined capacity of 4 GW. 

"It is the wrong decision given the little we would save," Habeck said in a discussion with citizens, according to Reuters. Habeck is a member of the Greens, which forms one of the three parties in the coalition government and has long opposed atomic energy.

Germany's government has committed to phasing out Russian gas imports by 2024, but some politicians in parliament have meanwhile called for the shelved Nord Stream 2 pipeline to be brought online to ease the supply crunch. Wolfgang Kubicki, vice president of the parliament and a member of another party in government, the Free Democrats, urged on August 19 for the pipeline to be put into operation "as soon as possible" so that "people do not have to freeze in winter and that our industry does not suffer serious damage."

There is "no sound reason not to open Nord Stream 2," he said, arguing that Germany already gets Russian gas via Nord Stream 1, and so receiving supplies via the second Baltic pipeline "was no more immoral."

German chancellor Olaf Scholz halted the certification process necessary for Nord Stream 2 to flow gas commercially on February 22 in response to Moscow's recognition of east Ukraine's breakaway regions of Donetsk and Lugansk as independent. That was two days before Moscow launched its all-out invasion of Ukraine.