Nord Stream gas flows resume after maintenance work completed, prices dip

Gas flows on the Nord Stream pipeline from Russia to Germany resumed July 21 after maintenance on the route was completed on schedule, bringing some relief to the European gas market and triggering an early drop in prices.

The Dutch TTF front-month price fell as much as 6.5% at the start of trading to Eur145/MWh ($149/MWh) before rebounding later July 21.

The TTF month-ahead contract was assessed on July 20 at Eur155/MWh, according to Platts price assessments from S&P Global Commodity Insights.

The 55 Bcm/year Nord Stream pipeline was closed for annual 10-day maintenance work July 11 and resumed operations as planned on July 21, the pipeline operator said.

There had been concerns the pipeline might not restart after the maintenance shutdown on fears that Russia could use it as leverage to put more pressure on Europe and European gas markets.

"Gas transmission via the Nord Stream pipeline resumed after completion of planned annual maintenance works," the operator said in a statement on its website.

"All planned annual maintenance works on the gas pipelines have been completed on time," it said. "Gas transmission resumed on July 21."

According to Nord Stream data, flows resumed at a rate of close to 21,400,000 kWh/h, or the equivalent of around 48 million cu m/d, in the first hour of operation.

It rose to just short of 29,300,000 kWh/h in subsequent hours, or around 66 million cu m/d on a daily basis -- similar to the flow level before the maintenance began.

Flows via Nord Stream were capped at 67 million cu m/d mid-June -- just 40% of the pipeline's capacity -- with Russia's Gazprom blaming the cuts on the late return from maintenance in Canada of a gas turbine and maintenance issues with another turbine deployed at the Portovaya compressor station.

Nord Stream AG is a consortium made up of Gazprom with a 51% stake, Germany's Wintershall Dea and E.ON (15.5% each), and Dutch Gasunie and France's Engie (9% each).

'Political language'

Later July 21, the German economy ministry said while gas flows from Russia via Nord Stream had returned post-maintenance at low levels, there was no "technical" reason to prevent full capacity utilization.

"The lower capacity utilization of around 40% therefore speaks a clear political language and confirms that we cannot rely on deliveries from Russia," economy minister Robert Habeck said.

Habeck said the goal of Russian President Vladimir Putin was to unsettle markets, drive up prices, divide society and weaken support for Ukraine.

"We do not bow to this, but counter it with concentrated and consistent action," Habeck said.

Germany on July 21 unveiled a new package of energy security measures to improve resilience given Russian supply uncertainty, which included stricter gas storage targets.

The German regulator, the Bundesnetzagentur, said July 21 the situation on the German gas market remained tense despite the resumption of Nord Stream flows and that a worsening of the situation could not be ruled out.

"Nord Stream maintenance has ended, and gas flows are currently around 40% of maximum performance," it said in its daily market update.

It said that if Nord Stream flows remained at that "low level," then it would be difficult for Germany to meet a storage targets without additional measures.

Germany's storage sites were 65.1% full, the regulator said, with the major Rehden site at 34.7% of capacity.

More cuts?

There remained concern that Nord Stream flows could still be reduced further, however, due to ongoing uncertainty over the maintenance of Portovaya turbines.

Late July 19, Putin said Nord Stream supplies could be reduced to just 30 million cu m/d if Portovaya was left with only one operational gas turbine.

"At present there are two [operational turbines], and 60 million [cu m] are pumped per day," Putin said in Tehran, pointing to the flows that were running ahead of the planned maintenance shutdown July 11 that reduced flows to zero.

Putin said one turbine was due to be sent for scheduled repairs July 26, which would leave only one operational turbine unless the turbine that had been blocked by sanctions in Canada after maintenance was swiftly returned to Russia.

Ottawa granted a sanctions waiver to allow for the turbine to be returned earlier this month.

"If another one comes, then fine, two will work," Putin said. "And if it does not come, there will be one, it will be only 30 million cu m/day."

Putin said there were a total of five Siemens gas turbines that could work to flow gas via Nord Stream, but that there had been issues with a number of the turbines, including one that had failed due to "internal lining" falling off.

He also said the repaired turbine to be returned to Russia needed to be accompanied by relevant documentation.

"Gazprom should receive legal and technical documentation. We must understand what Gazprom is receiving, in what condition the turbine is returned and what its legal status is. Is it under sanctions or not under sanctions? Perhaps tomorrow they will take it back?" he said.

A spokesperson for Siemens told S&P Global Commodity Insights July 20 that under normal circumstances, the maintenance of turbines was a routine operation.

"If politically requested and possible due to the sanctions regime, we will therefore maintain further turbines with the usual high quality standards if we are asked to do so," the spokesperson said.

"Our goal in such cases is always to transport the turbine to its place of operation as quickly as possible."