Vital Russian Gas Supplies to Europe Aren’t Expected to Restart, Says European Commission – US Gas Producers under Pressure!

US gas producers under pressure as Russia cuts off supplies in Europe! 

As Europe races to wean itself off Russian energy, American natural-gas producers are struggling to meet the demand. As a result, prices are rising. 

SINGAPORE—The European Union is working under the assumption that Russia’s Nord Stream pipeline won’t return to operation when scheduled maintenance ends this week, officials said Tuesday. And are working through contingency planning even as they hold out hope the gas flows will resume.

Nord Stream, the main artery for Russian gas to Europe, closed on July 11 for annual maintenance that is expected to last 10 days. 

Many in the West fear that Moscow might prolong the closure, possibly permanently, and deprive Germany, Europe’s industrial powerhouse, of a key ingredient for its and its neighbors’ factories.

Even before the maintenance began, Moscow had cut deliveries on the pipeline to 40% of its capacity.

“What is the worst possible scenario—and this therefore has to be the assumption for our planning—that there will be a full disruption by Gazprom. Whether it will happen or not, we don’t know,” said Eric Mamer, chief spokesman for the European Commission, the EU’s executive arm.

While German officials expect Nord Stream to restart supply, albeit at a lower volume, Germany’s government is also preparing for the worst-case scenario of the pipeline remaining permanently closed.

“It is impossible for us to predict how Gazprom is going to act. We already have 12 countries, or in certain cases companies within countries, that from one day to the next have experienced disruptions,” Mr. Mamer said. “Therefore what Gazprom is going to do tomorrow is your best guess as well as ours.”

Privately, EU officials also say they haven’t received any information from Gazprom or its clients on the energy giant’s plans.

Earlier, European Commission budget czar Johannes Hahn told reporters on the sidelines of a conference in Singapore that the EU is “working on the assumption” that the Nord Stream pipeline won’t return to operation. He gave no further details.

The Commission will release a plan tomorrow that is meant to help governments prepare for a possible halt in Russian gas supplies.

A draft version of the plan viewed by The Wall Street Journal said the commission wants to encourage consumers and governments to step up energy conservation efforts beginning this summer. 

Even if the flow of Russian gas doesn’t stop right away, the draft document said, reducing gas use now should help countries fill their storage tanks and reduce the chance of a shortfall during the winter heating season.

The plan will also lay out a set of criteria that governments can use to help determine which industries to give priority to if there isn’t enough gas to go around.

European industries are preparing to ration gas to allow enough fuel for heating as temperatures drop. As Europe’s biggest consumer of Russian gas, Germany is particularly vulnerable, its industrial base relies on Russian supplies as a source of energy and raw materials.

Mr. Hahn was in Singapore to promote an EU investment and recovery plan. The bloc is hoping to raise around 800 billion euros, equivalent to $812 billion, from domestic and foreign investors over the next few years.

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Source: wsj.com