Leaks in Nord Stream Gas Pipelines will further Hamper Natural Gas Supply Through Pipeline in Europe
Natural Gas supply through the pipeline in Europe will be hampered due to the leaks in North Stream Gas Pipelines. The benchmark Dutch TTF contract for gas prices in Northwest Europe was up 8.8 percent at 189.10 EUR/MWh by 05:30 ET, after hitting two months low of 168.50 EUR/MWh on September 26, 2022.
The movement was prompted by a warning from Sweden’s Maritime Authority about additional leakage on the Nord Stream pipelines, which travel from Russia beneath the Baltic Sea to Germany. Before Russia’s invasion of Ukraine, the second line had been filled with gas but had not started operating commercially.
In contrast, Russia has stopped flows on the first line, citing mechanical issues, which the German government has dismissed as a made-up justification for a politically motivated stoppage.
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A breach on the second line was discovered on September 26, 2022, by Denmark’s maritime safety authority, while the SMA reported that it had found two leaks on the first line. Because explosive gas was present at the leak’s site, both authorities advised ships to maintain a distance of at least five nautical miles from the area.
Nord Steam is the company in charge of the pipeline. Undersea gas pipeline leaks are highly uncommon, thus the findings of three within a 24-hour period aroused concerns and resulted in sabotage, which aided Russia’s campaign of economic pressure on Europe to end its support for Ukraine.
Natural gas prices continued to be on the upper end in Quarter-2 of 2022 due to the positive market conditions and a high level of consumer interest. Prices dropped back to levels after an extraordinary price increase in early March, but they stayed high.
In Europe, fluctuating temperatures, a dramatic decline in gas consumption, an increase in LNG imports, and high stock fill rates all helped it to keep the costs in check.
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Russian gas supply was cut through the Nord Stream pipeline and a turnaround at the Freeport LNG plant in the United States, and the spot prices in the European market were driven once again in June 2022. Gazprom tightened up gas supply to the European Union much more in June 2022 putting the big downstream derivative manufacturers under pressure to match the demand from the consumer end.
As per Procurement Resource, due to the leakage in the North Stream Gas Pipelines, the supply of natural gas through the pipeline to Europe will be hindered. By 05:30 ET, the benchmark Dutch TIF contract for gas prices in Northwest Europe had increased 8.8% to 1.89.10 euros per megawatt-hour after falling to a two-month low of 168.50 EUR/MWh on September 26, 2022.
Although since June spot prices in the European market have increased once more due to Russian gas supply restrictions through the Nord Stream pipeline and a turnaround at the Freeport LNG project in the United States. Whereas Gazprom also significantly tightened its EU's gas supplies in June 2022.