Gas leaks suspend Nord Stream 1 pipeline operations indefinitely
Massive leaks of natural gas from Nord Stream 1, an offshore pipeline connecting Russia and Western Europe, were reported in the Baltic Sea. The cause of the incident is still under investigation, but the near-simultaneous occurrence of at least four leaks makes sabotage a strong possibility. Whether the culprit was Russia or even Ukraine, the result is the same: The pipeline has suspended operations indefinitely.
The incident puts Europe into a still more precarious situation, eliminating the pipeline as a last resort for natural gas this winter. Putin had already suspended gas exports via pipeline in response to European sanctions following Russia’s invasion of Ukraine; Russian authorities had blamed prior stoppages on maintenance difficulties caused by prior sanctions. The good news is that reserve stocks had been climbing in Germany ahead of winter and that floating LNG platforms and storage facilities are also operating. The bad news is that market reacted to leaks, with Dutch TTF prices spiking above 200 euros per MWh this week. Furthermore, there is no immediate alternate source for Europe’s natural gas needs other than LNG.
Swedish and Danish seismologists detected what they believe to be explosions along the undersea route of the pipeline, near the Danish island of Bornholm. No seismic activity, either earthquakes or undersea landslides, had been recorded prior to the leaks, further strengthening the case for sabotage. Following the leaks, a rapid drop in pressure was detected in the pipeline, and bubbles of natural gas were observed on the sea’s surface (see image).
Ukraine has denied any association with any attack, instead suggesting that this was likely Russia’s response to Europe’s criticism of the recent referendum votes in Russian-held eastern regions of Ukraine.
Source: Congressional Research Service, Gazprom, McKeany-Flavell