The letter reinforces European fears that Moscow could keep the pipeline “frozen” in retaliation for sanctions imposed on Russia over its war in Ukraine, intensifying an energy crisis that threatens to plunge the European economy into recession.
The Russian energy giant Gazprom has informed its customers in Europe that it cannot guarantee natural gas deliveries citing “extraordinary” circumstances, according to a letter leaked to Reuters, intensifying the “bra de fer” with the West following Russia’s invasion of Ukraine.
In the letter of July 14, the Russian state gas monopoly retroactively invokes force majeure in respect of deliveries dating back to 14 June. The news comes as Nord Stream 1, the main pipeline carrying Russian natural gas to Germany and beyond, undergoes annual maintenance scheduled to end on Thursday.
The letter reinforces European fears that Moscow could keep the pipeline “frozen” in retaliation for sanctions imposed on Russia over its war in Ukraine, intensifying an energy crisis that threatens to plunge the European economy into recession.
The invocation of “force majeure” is not uncommon in business contracts and describes extreme circumstances that exempt one of the contracting parties from its legal obligations, Reuters noted, noting that Gazprom did not respond to a request for comment.
Natural gas deliveries from Russia have been falling through major pipelines for several months, including through Ukraine and Belarus but also through Nord Stream 1 in the Baltic Sea.
According to a well-informed source cited by Reuters, who has not been named, the force majeure reasons relate to natural gas deliveries via the Nord Stream 1 pipeline.
“This sounds like a first indication that natural gas deliveries through Nord Stream 1 may not resume after the 10-day maintenance is over,” said Hans van Cleef, senior economic analyst at ABN Amro, who specializes in energy issues.
“Depending on what ‘extraordinary’ circumstances they have in mind in order to invoke force majeure, and whether these issues are technical in nature or more political, this could be the next step in the escalation (of the crisis) between Russia and Europe /Germany”, he added.
Uniper, Germany’s biggest importer of Russian gas, was among the customers who reported receiving the letter and dismissed the claim as unfounded.
RWE, Germany’s biggest electricity producer and another importer of Russian gas, also said it had received the force majeure notice. “Please understand that we cannot comment on the details or our legal position,” the company said.
Delay in turbine delivery
On June 14, Russia’s Gazprom cut the pipeline’s flow to 40%, citing a delayed delivery of a turbine being repaired in Canada by equipment supplier Siemens Energy.
Canada airlifted the turbine for the pipeline to Germany on July 17 after repair work was completed, according to Kommersant newspaper, citing officials with knowledge of the matter.
It will take another 5-7 days for the turbine to arrive in Russia, according to the same source, provided there are no problems with logistics and customs.
Germany’s economy ministry said on Monday it could not provide details on the turbine’s location. However, a ministry spokesman said it was a spare part meant to be used from September, meaning its absence could not be the real reason for the reduction in gas flows ahead of the maintenance.
Austrian oil and gas group OMV, however, said on Monday that it expects natural gas deliveries from Russia via the Nord Stream 1 pipeline to resume as planned after the outage.
The European Union, which has imposed sanctions on Moscow, plans to end its use of Russian fossil fuels by 2027, but wants supplies to continue for now as it develops alternative sources.
For Moscow and Gazprom, the energy flows are vital revenue as Western sanctions over the invasion of Ukraine — which the Kremlin calls a “special military operation” — weigh heavily on the Russian economy.
According to Russia’s finance ministry, the federal budget was boosted by 6.4 trillion rubles ($114.29 billion) from oil and gas sales in the first half of the year. It is worth noting that the forecasts for 2022 spoke of total revenues of 9.5 trillion rubles.
It is recalled that the grace period for the payments of two Gazprom international bonds ends today.
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