The feared gas doomsday might arrive earlier than anticipated after Russian state-run oil firm Gazprom has reportedly declared the force majeure clause on at least one of its gas contracts.
In a letter seen and reported on by Reuters, the Russian oil giant communicated to at least one major customer that it would not be able to fulfill its obligations to supply gas through the Nord Stream 1 pipeline due to “extraordinary” circumstances beyond its control.
The gas pipeline, currently shut off for annual maintenance, is set to end the routine and go back online by July 21. However, many fear that with the escalating sanctions against Russia, President Vladimir Putin might choose to retaliate and keep the pipeline closed after maintenance.
Fears of a total cutoff have found more substantiation as Gazprom said on Wednesday–just after starting the 10-day maintenance–it cannot guarantee a “good functioning” of the Nord Stream pipeline as it is unsure if a “critical turbine engine” currently in repair will be returned in time from Canada.
On Sunday, Canada said the turbine has already been repaired and has been sent for the Nord Stream pipeline to Germany by plane that day.
Turbine problem was also the reason pointed to by the Russian state-run gas firm for why it reduced its gas deliveries to 40% through the pipeline starting June 14. Siemens apparently delayed the return of turbines required to conduct repairs on the pipeline.
In a scenario study released by the European country’s Federal Network Agency, only by reducing gas exports and keeping import levels from the Nord Stream 1 pipeline can the country achieve its set gas storage level goals.
Information for this briefing was found via Reuters. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.