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Germany worries that Russia’s gas shortage could be permanent

Germany worries that Russia’s gas shortage could be permanent

German imports of Russian natural gas through the Nord Stream 1 pipeline under the Baltic Sea have been stopped for ten days due to routine maintenance. But German Economy Minister Robert Habeck issued a warning that EU nations needed to be ready if gas imports would not start up again. In reaction to EU sanctions over the conflict in Ukraine, he has charged that the Kremlin has been using gas “as a weapon.” 

Mr. Habeck acknowledged that Germany had grown too reliant on Russian gas. By year’s end, he predicted, two floating terminals for LNG deliveries would be operational. Russian gas giant Gazprom reduced gas flows via Nord Stream 1 to just 40% of the pipeline’s capacity in the middle of June. It attributed the delay to the equipment being maintained by Siemens Energy in Germany. 

According to the Canadian government, a fixed Siemens turbine for the pipeline will now be delivered to Germany. The Ukrainian government was incensed by such action and claimed that Canada had changed the sanctions it had put in place against Moscow “at the whims of Russia.” Despite the restrictions, Canada says it is allowing Siemens Canada a “time-limited and revocable license” to transfer fixed turbines back to Germany. The government of Germany is concerned that gas supplies might be temporarily or permanently limited. 

Every summer, when gas demand is lower than in the winter, pipeline maintenance is customary. The concern is that Russia might not open the taps again. Italian energy company Eni said it would receive around a third less gas from Russia’s Gazprom on Monday compared to typical levels sent over the previous several days as a result of the pipeline outage. Fatih Birol, the director-general of the International Energy Agency, has cautioned that Russia may completely cut off gas supplies to Europe and that the continent has to start preparing right away. 

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Because entire sectors rely on gas and the majority of German houses use it for heating, a sudden overnight reduction in Russian supply might send Germany into a severe recession. 

Poland, Bulgaria, the Netherlands, Denmark, and Finland have already stopped receiving gas from Russia because they won’t accept a new payment system.

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