Summary
- Nord Stream faces major repair work
- Turkey ready to pursue Putin gas hub plan
- EU leaders seek to set new gas price benchmark
Large sections of the damaged Nord Stream pipelines constructed to deliver gas to Europe might require to be repaired, the head of Gazprom said, while Turkey on Friday supported Russian proposals to set up a gas hub there as an alternative supply route.
Russian President Vladimir Putin this week recommended Turkey as a base for gas deliveries after the Nord Stream pipelines under the Baltic Sea were damaged in September by explosions.
The European Union, which previously looked to Russia for about 40% of its gas supplies, is however trying to cut its reliance on Russian energy following the country’s invasion of Ukraine in February.
Top EU importers such as Italy and Germany have obtained alternative sources and stacked up gas stocks ahead of a winter that is expected to be harsh because of soaring energy prices and the fear of rationing and power outages.
Both Nord Stream 1 and Nord Stream 2, linking Russia and Germany, were destroyed in September, spilling a huge amount of gas. Russia and the West have attributed the damage to sabotage but have not named a culprit.
Alexei Miller, CEO of Russian gas company Gazprom, told Russia’s state TV Channel One:
“Experts say that in order to restore work after such a terrorist act, it is necessary to actually cut off a very large piece of pipe, at a great distance, and in fact build a new section on this section.”
With Nord Stream not functioning, Miller said that Russia will begin “concrete” talks with Turkey next week on proposals to send more gas their way. Turkish President Tayyip Erdogan has instructed the energy ministry to work on setting up a hub following talks with Putin on the matter, NTV and other local news channels reported.
Security Fears Over Nord Stream Crisis
The Nord Stream explosions have deepened concerns over energy security in Europe as the war rages in Ukraine. Norwegian police on Friday looked into reports of a drone seen flying over the Kaarstoe gas processing plant in the southwest of the country in a possible breach of security protocols.
Police also addressed on October 13 a threat made by telephone against the Nyhamna gas plant, which alongside Kaarstoe and a few other Norwegian sites rank among Europe’s biggest energy export facilities.
Norway is currently Europe’s leading gas supplier after a sharp cut to flows from Russia. Seeking to contain energy prices for industries and consumers, EU leaders may back plans to introduce a new gas price benchmark at a meeting next week, a draft document showed.
The leaders are scheduled to meet on Oct. 20-21, days after the European Commission suggested measures to curb the energy crisis.
The benchmark for liquefied natural gas supplies into Europe has historically been dependent on the price at the Netherlands’ Title Transfer Facility (TTF) hub. Brussels says a new index is required since the TTF is driven by pipeline supply and no longer symbolizes a market that includes more LNG.
Buy Crypto NowIt remains undetermined if EU leaders will decide on a “temporary market intervention” – wording that could mean a gas price cap that has proved disruptive.
Belgian Prime Minister Alexander De Croo cautioned that a unilateral cap on electricity prices requested by the national opposition could lead to power being sold in other markets and power cuts in Belgium, the heart of the EU.
British shoppers are meanwhile responding to the risk of power cuts by stocking up on portable generators and torches, as well as candles, winter clothing, and thermal underwear.
