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World

Gas from Russia’s Nord Stream 2 pipeline leaks into Baltic Sea

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BERLIN, Sept 26 (Reuters) – The Danish authorities on Monday asked ships to steer clear of a five nautical mile radius off the island of Bornholm after a gas leak overnight from the defunct Russian-owned Nord Stream 2 pipeline drained into the Baltic Sea.

The German government said it was in contact with the Danish authorities and working with local law enforcement to find out what caused pressure in the pipeline to plummet suddenly. Denmark’s energy ministry declined to comment.

The pipeline has been one of the flashpoints in an escalating energy war between Europe and Moscow since Russia’s invasion of Ukraine in February that has pummelled major Western economies and sent gas prices soaring.

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“A leak today occurred on the Nord Stream 2 pipeline in the Danish area,” said Denmark’s energy agency in a statement.

Danish maritime authorities had issued a navigation warning and established a zone around the pipeline “as it is dangerous for ship traffic”, it added.

Nord Stream 2’s operator said pressure in the pipeline, which had contained some gas sealed inside despite never becoming operational, dropped from 105 to 7 bars overnight.

The pipeline, which was intended to double the volume of gas flowing from St. Petersburg under the Baltic Sea to Germany, had just been completed and filled with 300 million cubic metres of gas when Germany cancelled it days before the invasion.

“Overnight the Nord Stream 2 landfall dispatcher registered a rapid gas pressure drop on Line A of the Nord Stream 2 natural gas pipeline,” Nord Stream 2’s operator said in a statement.

“Investigation is ongoing.”

NO CLARITY

European countries have resisted Russian calls to allow the Nord Stream 2 pipeline to operate and accused Moscow of using energy as a weapon. Russia denies doing so and blames the West for gas shortages.

“We are currently in contact with the authorities concerned in order to clarify the situation. We still have no clarity about the causes and the exact facts,” said a statement from the German economy ministry.

The Swiss-based operator, which has legally been wound up, said it had informed all relevant authorities about the leak.

Russian gas exporter Gazprom (GAZP.MM) referred questions about the incident to the Nord Stream 2 operator.

Russia has cut off gas supplies to several countries and also halted flows through the Nord Stream 1 pipeline, blaming Western sanctions for hindering operations.

President Vladimir Putin in September chided the West for keeping Nord Stream 2 shut. read more

Monday’s gas leak happened a day before the ceremonial launch of the Baltic Pipe carrying gas from Norway to Poland.

The project is a centrepiece of Warsaw’s efforts to diversify from Russian gas. Danish Prime Minister Mette Frederiksen is due to travel to Poland on Tuesday to mark the occasion.

Nord Stream 2 was widely unpopular among Danish lawmakers and the country in 2017 passed a law which allowed it to ban the project from passing through its territorial waters on security grounds.

But Nord Stream 2 later changed the original route to steer it through Denmark’s exclusive economic zone, where this veto could not be applied.

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Reporting by Thomas Escritt, Christian Kraemer, Stine Jacobsen, Terje Solsvik, Marek Strzelecki and Matthias Williams; Writing by Matthias Williams; Editing by Andrea Ricci and Mark Potter

Our Standards: The Thomson Reuters Trust Principles.

Thomas Escritt

Thomson Reuters

Berlin correspondent who has investigated anti-vaxxers and COVID treatment practices, reported on refugee camps and covered warlords’ trials in The Hague. Earlier, he covered Eastern Europe for the Financial Times. He speaks Hungarian, German, French and Dutch.

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World

Hurricane Fiona slams Turks and Caicos as Category 3 storm, heads for Bermuda

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SAN JUAN, Puerto Rico, Sept 20 (Reuters) – Hurricane Fiona slammed into the Turks and Caicos Islands as a powerful Category 3 storm on Tuesday, dumping heavy rains and triggering floods on the Caribbean archipelago after cutting a path of destruction through the Dominican Republic and Puerto Rico.

U.S. officials said the storm had claimed four lives in Puerto Rico. A fifth person was killed in Guadeloupe earlier in the week.

U.S. Health Secretary Xavier Becerra declared a public health emergency for Puerto Rico on Tuesday night, freeing up federal funds and equipment to assist the island.

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The storm slammed Grand Turk, the Turks and Caicos’s biggest island on Tuesday morning, before hitting its main cluster of islands several hours later.

Strengthening with wind speeds of 125 mph (201 kmh), Fiona was heading north towards Bermuda on Tuesday night and was expected to strike as a Category 4 storm on Thursday, the National Hurricane Center (NHC) said.

Canadian officials warned of powerful post-tropical conditions hitting Nova Scotia, Newfoundland, New Brunswick and Price Edward Island by Saturday.

Turks and Caicos Deputy Governor Anya Williams said power outages had hit five islands but no deaths had yet been reported.

“Shutting the country down early is what helped us save lives,” Williams told Reuters. She said her government was communicating with the British Royal Navy and U.S. Coast Guard, with the British Navy patrol vessel HMS Medway expected to arrive on Tuesday night to help with rescue efforts.

Jaquan Harvey, 37, a businessman who lives on Grand Turk, said wind drove rain water through the seams of the windows and doors as his house shook.

“It was very loud, like there were giants outside shouting and roaring,” Harvey said. “You could feel the pressure of the air as everything rattled.”

To the south, the Dominican Republic and Puerto Rico were stunned by the storm’s intensity and were struggling to cope with the aftermath.

Deanne Criswell, head of the Federal Emergency Management Agency (FEMA), arrived in Puerto Rico – a U.S. territory – on Tuesday to assess the damage, agency officials said.

Officials said multiple FEMA teams, including two search and rescue units, were being deployed and several hundred FEMA personnel were already on the island.

PAINFUL ANNIVERSARY

Aerial view of the river Soco in the aftermath of Hurricane Fiona, in El Seibo, Dominican Republic, September 20, 2022. REUTERS/Jesus Frias

Hurricane Fiona was a painful reminder of Puerto Rico’s vulnerability. Tuesday marked the five-year anniversary of Hurricane Maria, a Category 5 storm which killed about 3,000 people and destroyed its power grid.

Thousands of Puerto Ricans still live under tarpaulin roofs.

Fiona made landfall in Puerto Rico on Sunday afternoon, dumping up to 30 inches (76.2 cm) of rain in some areas and triggering catastrophic flooding.

Nearly 80% of Puerto Rico remained without power on Tuesday, according to Poweroutage.us. Officials said it would take days to reconnect the whole island of 3.3 million people.

“It knocked down many trees, there are downed poles and here in the house we got water where it had never happened before,” said Asbertly Vargas, a 40-year-old mechanic in Yauco, a town along the island’s southern coast.

Puerto Rico power provider LUMA Energy said it had restored electricity to 100,000 customers but that it would take days for full restoration.

On the Turks and Caicos Islands, a British Overseas Territory with a population of about 40,000 about 700 miles (1,125 km) southeast of Florida, the government told residents to shelter in place until further notice, and ordered businesses to close.

Foreign governments issued travel alerts for the islands, a popular tourist destination.

Similar preparations were under way in the eastern Bahamas, which the storm could skirt on Wednesday.

It could mushroom into a Category 4 storm in coming days, reaching Canada’s Atlantic coast by late Friday, the NHC said.

Hurricanes are deemed “major” by the NHC once they reach Category 3 status, which is wind speeds of between 111mph and 129mph (178kmh-208kmh). A Category 4 storm has “catastrophic” wind speeds of between 130mph and 156mph. The most powerful Category 5 hurricane has wind speeds exceeding 157mph.

In the Dominican Republic, severe flooding limited road access to villages, forced 12,500 people from their homes and knocked out power to hundreds of thousands of people.

Fiona was the first hurricane to score a direct hit on the Dominican Republic since Jeanne left severe damage in the east of the country in 2004.

As of Monday night, the country’s emergency center counted more than 1.1 million people without drinking water and more than 700,000 without electricity.

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Reporting by Ivelisse Rivera, Ezequiel Abiu Lopez and Rich McKay in Atlanta; Additional reporting by Tim Reid and Brad Brooks; Writing by Tyler Clifford; Editing by Richard Chang and Stephen Coates

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World

Hurricane Fiona seen intensifying after slamming Dominican Republic, Puerto Rico

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SAN JUAN, Puerto Rico/Santo Domingo, Sept 19 (Reuters) – Hurricane Fiona was churning north on Monday evening after bringing torrential rain and powerful winds to the Dominican Republic and triggering a total power outage in neighboring Puerto Rico, where at least two people died.

The Category 2 hurricane will likely become a Category 3 as it moves across warm Caribbean waters toward the Turks and Caicos. Fiona was upgraded to a Category 2 with winds of 105 mph (169 kph) by the National Hurricane Center on Monday evening.

On Tuesday, the center of Fiona is expected to pass near or to the east of the archipelago, which is subject to a current hurricane warning, the U.S. National Hurricane Center (NHC) said. Tropical storm conditions were also expected in the Bahamas.

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After strafing Puerto Rico, Fiona made landfall in the Dominican Republic near Boca Yuma at 3:30 a.m. local time, according to the NHC. The center of the storm reached the northern coast of Hispaniola before noon.

It is the first hurricane to score a direct hit on the Dominican Republic since Jeanne left severe damage in the east of the country in September 2004.

Fiona caused severe flooding, leaving several villages isolated, and some 800 evacuees and more than 11,000 people without power in the eastern region of the country.

“The damage is considerable,” said Dominican Republic President Luis Abinader. He plans to declare a state of disaster in the provinces of La Altagracia, where the famed resort of Punta Cana is located, El Seibo and Hato Mayor.

In La Altagracia, in the extreme east of the country and where the hurricane made landfall Monday morning, the overflow of the Yuma River damaged agricultural areas and left several towns isolated.

Electric and water utilities are working to restore services in affected areas.

In Puerto Rico, a territory of the United States, residents were still facing strong winds, frequent lightning and heavy rain.

Fiona made landfall there on Sunday afternoon, dumping up to 30 inches (76.2 cm) of rain in some areas.

The storm comes five years after the Puerto Rico was ravaged by Hurricane Maria, which triggered the worst power blackout in U.S. history.

U.S. President Joe Biden spoke with Puerto Rico Governor Pedro Pierluisi on Monday, promising to increase the support personnel sent to the island over the next few days.

“The President said that he will ensure that the Federal team remains on the job to get it done,” according to the White House.

Federal Emergency Management Agency (FEMA) Administrator Deanne Criswell will travel there on Tuesday.

Jeannette Rivera, 54, a public relations worker in Orlando, Florida, said she had not spoken with her family since a spotty phone call early Sunday.

A view of destroyed buildings in the aftermath of Hurricane Fiona in Punta Cana, Dominican Republic, September 19, 2022. REUTERS/Ricardo Rojas

She fears for her parents’ safety and the health of her 84-year-old father, who had just contracted COVID-19 and was running a fever.

“My worry is that if they need help, there’s no way to communicate,” Rivera said.

WITHOUT POWER

Nearly 90% of Puerto Rico remained without power on Monday, according to Poweroutage.us. Officials said it would take days to reconnect the whole island of 3.3 million people.

Many roads were left impassable due to downed trees and mudslides. Images on social media depicted submerged cars, people wading in waist-deep water and rescue boats floating down swamped streets. Just 30% of drinking water customers have service.

Crews rescued some 400 people from flooding in Salinas, a town in the south where rain has turned to a drizzle. The south and southeast regions were the hardest hit.

Puerto Rico’s power grid remains fragile despite emergency repairs after Maria, according to Center for a New Economy, a Puerto Rican think tank.

Maria, a Category 5 storm in 2017 which killed more than 3,000 people, left 1.5 million customers without electricity and knocked out 80% of power lines. Thousands of Puerto Ricans still live under makeshift tarpaulin roofs.

While the National Weather Service lifted its hurricane warning for Puerto Rico on Monday, officials warned that rainbands could follow the storm system for hundreds of miles.

A 70-year-old man in the northern town of Arecibo is the first known casualty in Puerto Rico. He was trying to start his electric generator when the machine exploded, killing him instantly, police said.

A second man drowned in the afternoon. Police said an 88-year-old woman died of a heart attack at a shelter.

Hundreds of responders were assisting in recovery efforts after Biden declared an emergency for the island, allowing FEMA to coordinate disaster relief and provide emergency protective measures.

Pierluisi said the government’s response has been much more efficient than during Hurricane Maria, which became highly politicized with former President Donald Trump’s administration criticized for being too sluggish in providing disaster relief. Trump refuted that.

The government has not estimated the damages, since it is still in the response period, though the governor said damages were in the millions.

For most of the five years since Maria struck Puerto Rico, the debt-laden government and the Puerto Rico Electric Power Authority were mired in bankruptcy and island finances were managed by a federally appointed oversight board.

(This story corrects year that Hurricane Jeanne struck Dominican Republic to 2004, not 2018, in 5th paragraph)

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Reporting by Ivelisse Riveria in San Juan and Ezequiel Abiu Lopez in Santo Domingo; Additional reporting by Tyler Clifford, Rich McKay, Trevor Hunnicutt, Mica Rosenberg, Christian Plumb and Tim Reid; Writing by Tyler Clifford and Costas Pitas; Editing by Frank McGurty, Mark Porter, Richard Chang and Leslie Adler

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Business

Europe races to prepare for energy crunch this winter

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  • Spain may shut energy-intensive industries at peak times
  • France prepares to send gas to Germany in October
  • Germany to sign LNG contracts in UAE
  • Berlin still working on Uniper bailout

BERLIN/LISBON, Sept 19 (Reuters) – Germany was pressing on Monday to secure liquefied natural gas contracts with Gulf producers and other European states outlined measures to conserve energy, with Russian flows running at severely reduced levels as winter approaches.

Berlin said it aimed to sign LNG contracts in the United Arab Emirates to supply terminals it is building, now that the vital Nord Stream 1 gas pipeline from Russia is shut, while Spain, France others outlined contingency planning to try to avoid power cuts. read more

“If everything goes well, savings in Germany are high and we have a bit of luck with the weather, we … have a chance at getting through the winter comfortably,” Economy Minister Robert Habeck said after a tour of a future LNG terminal in northern Germany. read more

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The sharp drop supplies from Russia, which previously supplied about 40% of the European Union’s gas needs, has left governments scrambling to find alternative energy resources and has prompted fears of possible power cuts and a recession.

Russia has blamed Western sanctions imposed on Moscow for its invasion of Ukraine for hampering pipeline deliveries. European politicians say Moscow is using energy as weapon.

Germany’s RWE (RWEG.DE) said it was “in good and constructive talks” with Qatar about LNG deliveries, before a planned visit by Chancellor Olaf Scholz to the Gulf. Ailing importer Uniper (UN01.DE) said it had not reached a deal yet.

Germany will also be able to count on gas flowing from France from around Oct. 10, the head of France’s CRE energy regulator said, following an announcement by President Emmanuel Macron that the two would help each other with energy supplies.

Although deliveries via the Nord Stream 1 have halted, Russian gas flows to Europe via Ukraine, although much reduced, have continued.

In France, CRE chief Emmanuelle Wargon said that if energy group EDF’s race to repair corrosion-hit nuclear reactors suffers delays, “exceptional” measures this winter could include localised electricity cuts. read more

“But there will be no gas cuts for households. Never,” she told franceinfo broadcaster.

‘DIFFICULT WINTER’

Across the Pyrenees, Spanish Industry Minister Reyes Maroto said obliging energy-intensive companies to close during consumption peaks was an option this winter if required.

The companies would be compensated financially, she said in an interview with Spanish news agency Europa Press, adding there was no need to impose such closures now.

And Finns were warned by national grid operator Fingrid that they should be prepared for power outages. read more

Reflecting the disruptions caused across the continent, Finnish power retailer Karhu Voima Oy said it had filed for bankruptcy due to a sharp rise in electricity prices.

Meanwhile in Germany, Habeck said Berlin will not let large gas importers like VNG become insolvent, while an economy ministry spokesperson said “focused” discussions on aid were ongoing with ailing importer Uniper (UN01.DE). read more

Pipes at the landfall facilities of the Nord Stream 1 gas pipeline are pictured in Lubmin, Germany, March 8, 2022. REUTERS/Hannibal Hanschke

The German economy is contracting already and will likely get worse over the winter months as gas consumption is cut or rationed, the country’s central bank said on Monday.

In Portugal, the government was blunt about its concerns.

“From one day to another, we may have a problem, such as not being supplied the volume of gas that is planned,” environment and energy minister Duarte Cordeiro said, adding that Portugal was working to diversify its supplies to boost energy security.

“Portugal has been preparing, like all of Europe, for what will be a difficult winter,” he said, urging the European Commission to move forward with plans for a joint EU gas purchasing platform and defining import prices. read more

NORD STREAM 1 REQUESTS

Russia, which had supplied about 40% of the European Union’s gas before its February invasion of Ukraine, has said it closed Nord Stream 1 because Western sanctions hindered operations. European politicians say that is a pretext and accuse Moscow of using energy as a weapon.

German buyers briefly reserved capacity on Monday to receive Russian gas via the Nord Stream 1 pipeline, once one of Europe’s major gas supply routes, for the first time since the line was shut three weeks ago. But they soon dropped the requests.

It was not immediately clear why buyers had submitted requests for capacity when Russia has given no indication since it shut the line that it would restart any time soon. read more

Meanwhile, Ukraine accused Russian forces of shelling near the Pivdennoukrainsk nuclear power plant in Ukraine’s southern Mykolaiv region. read more

Since its forces were driven out of Kharkiv, Russia has repeatedly fired at power plants, water infrastructure and other civilian targets in what Ukraine says is retaliation for defeats on the ground. Moscow denies deliberately targeting civilians. read more

‘GOING BACK IN TIME’

European gas storages are now 85.6% full, with stocks in Germany close to 90%, data from Gas Infrastructure Europe showed.

“Stocks are set to continue to be built further, supported by the finalisation of planned maintenance work and increasing Norwegian flows as of this week,” analysts at Energi Danmark said in a morning note.

Europe’s imports of thermal coal in 2022 could be the highest in at least four years, analysts said.

“Europe is going back in time,” Rodrigo Echeverri, head of research at Noble Resources, told a conference.

Oil prices fell by more than 2% on Monday, pressured by expectations of weaker global demand and by U.S. dollar strength ahead of a potentially large interest rate hike, though supply worries limited the decline. read more

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Reporting by Reuters bureaus; Writing by Ingrid Melander; Editing by Edmund Blair, Mark Heinrich, Hugh Lawson and David Evans

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US

Pelosi condemns Azerbaijan’s attacks on Armenia

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  • Pelosi blames Azerbaijan for starting conflict
  • Azerbaijan says Pelosi endangering peace in Caucasus
  • Azerbaijan says Pelosi’s remarks unacceptable
  • Pelosi lauds Armenia’s ‘Velvet Revolution’
  • U.S. listening to Armenia on defence, Pelosi says

TBILISI, Sept 18 (Reuters) – U.S. House of Representatives Speaker Nancy Pelosi on Sunday strongly condemned what she said were “illegal” border attacks by Azerbaijan on Armenia, using a visit to the Russian ally to pledge American support for its sovereignty.

Pelosi cast her trip to Armenia, a sliver of land the size of U.S. state of Maryland that is wedged between Azerbaijan, Georgia, Turkey and Iran, as an attempt to strengthen support for what she cast as a beacon of democracy.

Speaking in the ancient city of Yerevan, Pelosi said her trip had significance following the “illegal and deadly attacks by Azerbaijan on Armenian territory” that triggered border clashes in which more than 200 people were killed.

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“We strongly condemn those attacks,” Pelosi said beside Armenian parliamentary speaker Alen Simonyan, who last week expressed unhappiness with the response of a Russian-led military alliance to Yerevan’s request for help. read more

Pelosi, who angered China with a trip to Taiwan last month, said it was clear that the border fighting was triggered by Azeri assaults on Armenia and that the chronology of the conflict should be made clear.

The fighting “was initiated by the Azeris and there has to be recognition of that,” Pelosi said.

Pelosi’s remarks drew an unusually strong rebuke from Baku, which said she was endangering the peace in the Caucasus.

“The unsubstantiated and unfair accusations levelled by Pelosi against Azerbaijan are unacceptable,” the foreign ministry said in a statement.

“This is a serious blow to the efforts to normalize relations between Armenia and Azerbaijan,” the ministry said, casting Pelosi’s remarks as “Armenian propaganda”.

Such a definitive apportioning of blame for the conflict goes beyond what the U.S. State Department has so far said in public. Secretary of State Antony Blinken expressed concerns over the fighting and called for calm but did not assign blame.

Armenia said Azerbaijan shelled at least six Armenian settlements inside the border shortly after midnight on Sept. 13, attacking civilian and military infrastructure with drones and large calibre guns. Yerevan said it was unprovoked aggression.

Azerbaijan, backed by Turkey, rejects those claims. Baku says Armenian sabotage units tried to mine Azeri positions, prompting soldiers to respond. Armenia says that narrative is Azeri disinformation.

RUSSIA’S BACKYARD

Russia, which repeatedly condemned Pelosi’s visit to Taiwan, considers the Caucasus as its own sphere of influence and bristles at what it casts as U.S. meddling in the region.

Moscow though, is preoccupied by the war in Ukraine which has triggered the biggest confrontation with the West since the height of the Cold War.

Russia is Armenia’s major military ally, has a military base in northern Armenia and peacekeepers along the contact line in Nagorno-Karabakh, over which Armenia and Azerbaijan fought a war in 2020.

President Vladimir Putin said on Friday that Russia had enough resources to mediate in the conflict. The latest fighting ended after a Russian-brokered ceasefire.

But after appeals for help, the Collective Security Treaty Organization (CSTO), a Russian-led military alliance of former Soviet republics that includes Armenia but not Azerbaijan, decided on Tuesday to dispatch a monitoring mission.

Armenian Parliamentary Speaker Simonyan said he was dissatisfied with the response, likening the CSTO to a pistol that did not shoot bullets.

Speaking beside Pelosi, U.S. Representative Frank Pallone said the United States wanted to do whatever it could to be more supportive of Armenia’s security.

The United States, Pelosi said, was listening to Armenia about what its defence needs were and said Washington wanted to help and support Armenia in what she cast as a global struggle between democracy and autocracy.

“We should be using our influence, our leverage showing that Armenian democracy and sovereignty is a priority,” Pelosi said. “The velvet revolution was cheered globally.”

Armenian Prime Minister Nikol Pashinyan rose to power in 2018 after anti-government protests referred to as Armenia’s Velvet Revolution.

Pelosi said it was interesting that Armenia was disappointed by the response from Russia.

“It is interesting that they were disappointed they got fact finders and not protection from that relationship and we’ll see what happens next,” she said.

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Writing by Guy Faulconbridge, Editing by William Maclean, Emelia Sithole-Matarise and Alex Richardson

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World

Putin tells Europe: if you want gas then open Nord Stream 2

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SAMARKAND, Uzbekistan, Sept 16 (Reuters) – President Vladimir Putin on Friday denied Russia had anything to do with Europe’s energy crisis, saying that if the European Union wanted more gas it should lift sanctions preventing the opening of the Nord Stream 2 pipeline.

Speaking to reporters after the Shanghai Cooperation Organisation summit in Uzbekistan, Putin blamed what he called “the green agenda” for the energy crisis, and insisted that Russia would fulfil its energy obligations.

“The bottom line is, if you have an urge, if it’s so hard for you, just lift the sanctions on Nord Stream 2, which is 55 billion cubic metres of gas per year, just push the button and everything will get going,” Putin said.

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Nord Stream 2, which lays on the bed of the Baltic Sea almost in parallel to Nord Stream 1, was built a year ago, but Germany decided not to proceed with it just days before Russia sent its troops into Ukraine on Feb. 24.

Russian President Vladimir Putin speaks during a news conference following the Shanghai Cooperation Organization (SCO) summit in Samarkand, Uzbekistan September 16, 2022. Sputnik/Sergey Bobylev/Pool via REUTERS

European gas prices more than doubled from the start of the year amid a decline in Russian supplies.

This year’s price surge has squeezed struggling already consumers and forced some industries to halt production.

Europe has accused Russia of weaponising energy supplies in retaliation for Western sanctions imposed on Moscow over its invasion of Ukraine. Russia says the West has launched an economic war and sanctions have hampered Nord Stream 1 pipeline operations.

Russia has cut off gas supplies to several countries, includingBulgaria and Poland, because they refused to pay in roubles rather than the currency of the contract.

Russian gas giant Gazprom (GAZP.MM) also said earlier this month the Nord Stream 1 pipeline, Europe’s major supply route, would remain shut as a turbine at a compressor station had an engine oil leak, sending wholesale gas prices soaring. read more

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Reporting by Reuters; Editing by Kevin Liffey/Guy Faulconbridge

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Business

Germany, EU race to fix energy crisis

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  • Germany plans to expand lending to energy firms
  • EU securities watchdog mulling EU-wide measures
  • Commission to announce broader plans on Wednesday

BERLIN/FRANKFURT, Sept 13 (Reuters) – Germany will step up lending to energy firms at risk of being crushed by soaring gas prices, it said Tuesday, as Europe readied proposals to help households and industry cope with an energy crisis.

The European Commission will on Wednesday announce targets to cut electricity consumption and a revenue cap for non-gas fuelled plants. Energy ministers will hold an emergency meeting on Sept. 30 to discuss them. read more

Separately, the EU’s securities watchdog is considering measures to help energy firms struggling to meet rocketing collateral demands. Firms were caught out by surging prices after Russia cut gas supplies to Europe to counter Western sanctions following Moscow’s invasion of Ukraine. read more

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The crisis is weighing heavily on Europe’s economy, even before winter when industrial users could face rationing if gas reserves prove inadequate. Industry sentiment in the bloc’s economic powerhouse, Germany, has tumbled.

“Of course we knew, and we know, that our solidarity with Ukraine will have consequences,” German Chancellor Olaf Scholz said on Tuesday. He urged Germans to brace for a tough winter as its energy supply shifts from Russian gas. read more

Under pressure utilities are in line for further state aid.

Germany’s finance ministry wants to boost state loans for energy firms using facilities set up to offer relief during the COVID-19 pandemic, it said. The German cabinet is expected to approve draft legislation on Wednesday. The loan guarantees could amount to 67 billion euros ($68 billion). read more

Last week, VNG, one of Germany’s biggest importers of Russian natural gas, became the latest energy firm to ask the government for aid.

Uniper (UN01.DE), the country’s largest importer of Russian gas, was bailed out in July. It is weighing legal action in Sweden to claim billions of euros in compensation from Russia’s Gazprom (GAZP.MM), Reuters reported on Tuesday. read more

RAFT OF EU PROPOSALS

Companies may also benefit from an easing of regulations.

The European Securities and Markets Authority (ESMA) is “actively considering” whether any regulatory measures are necessary to help support energy firms, a spokesperson said on Monday. read more

ESMA regulates clearing houses in the EU, which in turn set minimum levels of collateral based on risks from markets and counterparties. Public intervention in this area is rare, especially after the global financial crisis over a decade ago led to tougher margin requirements.

A draft of the European Commission’s proposals, seen by Reuters, would cap at 180 euros per megawatt hour the price at which wind, solar and nuclear plants could sell their power in the 27-nation bloc. It would also force fossil fuel firms to share excess profits. read more

Governments would be required to use the cash to help consumers and companies facing sky-high energy bills.

EU officials said, however, that plans for emergency liquidity support for power firms facing soaring collateral needs were still being drafted, and would likely be published later than Wednesday.

NO GAS PRICE CAP

Diplomats say there is broad support for a revenue cap for non-gas generators, as well as plans to impose electricity demand cuts. But countries are split over other ideas – including a gas price cap.

The EU has also backed away from an earlier plan to impose a price cap on Russian gas. Countries including Hungary and Austria had opposed that idea in case Moscow retaliated by cutting off the supplies it still sends to the EU.

Meanwhile, investor sentiment in Germany deteriorated more than expected in September as concerns over its energy supply weighed on the outlook for Europe’s largest economy. read more

“The prospect of energy shortages in winter has made expectations even more negative for large parts of the German industry,” said Achim Wambach, president of the ZEW economic research institute.

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Additional reporting by Kate Abnett in Brussels and Andreas Rinke in Berlin; Writing by Ingrid Melander;
Editing by Mark Potter, Matt Scuffham and Mark Heinrich

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World

Ukrainian forces threaten Russian supply lines after breakthrough

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  • Zelenskiy says forces have recaptured towns and villages
  • Blinken visits Kyiv with new U.S. aid package

KYIV, Sept 9 (Reuters) – Swiftly advancing Ukrainian troops were approaching the main railway supplying Russian forces in the east on Friday, after the collapse of a section of Russia’s front line caused the most dramatic shift in the war’s momentum since its early weeks.

In a video address, President Volodymyr Zelenskiy said troops had “liberated dozens of settlements” and reclaimed more than 1,000 square km (385 square miles) of territory in Kharkiv region in the east and Kherson in the south in the past week.

Zelenskiy posted a video in which Ukrainian soldiers said they had captured the eastern town of Balakliia, which lies along a stretch of front stretching south of Kharkiv, Ukraine’s second largest city.

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The Ukrainian military said it had advanced nearly 50 km through that front after an assault that appeared to take the Russians by surprise.

It was the first lightning advance of its kind reported by either side for months, in a war mainly characterised by relentless grinding frontline battles since Russia abandoned its disastrous assault on the capital Kyiv in March.

Nearly 24 hours after Ukraine announced the breakthrough on the Kharkiv front, Russia had yet to comment publicly. The Kremlin declined to comment on Friday and referred questions to the Russian military.

Ukraine has not allowed independent journalists into the area to confirm the extent its advances. But Ukrainian news websites have shown pictures of troops cheering from armoured vehicles as they roar past street signs bearing the names of previously Russian-held towns, and Russian forces surrendering on the side of the road.

“We see success in Kherson now, we see some success in Kharkiv and so that is very, very encouraging,” U.S. Defense Secretary Lloyd Austin told a news conference with his Czech counterpart in Prague.

The Institute for the Study of War think tank said the Ukrainians were now within just 15 km of Kupiansk, an essential junction for the main railway lines that Moscow has long relied on to supply its forces on the battlefields in the east.

Since Russia’s forces were defeated near Kyiv in March, Moscow has used its firepower advantage to make slow advances by bombarding towns and villages. But that tactic depends on tonnes of ammunition a day reaching the front line by train from western Russia. Until now, Russia had successfully fended off Ukraine’s attempts to cut off that train line.

The Ukrainian general staff said early on Friday retreating Russian forces were trying to evacuate wounded personnel and damaged military equipment near Kharkiv.

“Thanks to skilful and coordinated actions, the Armed Forces of Ukraine, with the support of the local population, advanced almost 50 km in three days.”

Tens of thousands of people have been killed, millions have been driven from their homes and Russian forces have destroyed entire cities since Moscow launched what it calls a “special military operation” in February to “disarm” Ukraine. Russia denies intentionally targeting civilians.

In the latest reported strike on civilians, Ukrainian officials said Russia had hit a hospital near the international border in the northeastern Sumy region on Friday morning. Reuters could not independently confirm the report.

Firefighters work at the site of a residential building hit by a Russian military strike, amid Russia’s attack on Ukraine, in Kharkiv, Ukraine September 6, 2022. REUTERS/Sofiia Gatilova/File Photo

“Russian aviation, without crossing the Ukrainian border, fired at a hospital. The premises were destroyed, there are wounded people,” regional governor Dmytro Zhyvytskyi said on Telegram.

BREAKTHROUGH

The surprise Ukrainian breakthrough in the east came a week after Kyiv announced the start of a long-awaited counter-offensive hundreds of km away at the other end of the front line, in Kherson province in the south.

Ukrainian officials say Russia moved thousands of troops south to respond to the Kherson advance, leaving other parts of the front line exposed and creating the opportunity for the lightning assault in the east.

“We found a weak spot where the enemy wasn’t ready,” presidential adviser Oleksiy Arestovych said in a video posted on YouTube.

Less information so far has emerged about the campaign in the south, with Ukraine keeping journalists away and releasing few details.

Ukraine has been using new Western-supplied artillery and rockets to hit Russian rear positions there, with the aim of trapping thousands of Russian troops on the west bank of the wide Dnipro River and cutting them off from supplies.

Arestovych acknowledged progress in the south had not yet been as swift as the sudden breakthrough in the east.

Russia’s state news agency RIA quoted Russian-appointed Kherson authorities as saying some Ukrainian troops were captured during the counterattack and some Polish tanks they were using were destroyed. Reuters could not verify those reports.

The United Nations accused Moscow of denying access to thousands of prisoners of war, with the head of a U.N. human rights monitoring team in Ukraine, Matilda Bogner, describing documented cases of torture and ill-treatment of prisoners held by Russian forces and their proxies.

U.N. monitors had also documented incidents of torture and ill-treatment of POWs by Ukraine, which had given them unimpeded access, she said. Ukraine has said it will investigate any violations and take appropriate legal action.

Moscow denies abusing prisoners. Dozens of Ukrainian troops died in a fiery blast while being held by pro-Russian authorities in July in what Kyiv called a massacre. Moscow blamed Ukrainian shelling.

North of the battlefield, Russian missiles struck multiple areas in Kharkiv on Thursday, causing widespread damage and casualties, according to the regional prosecutor’s office.

“We are scared … You can’t get used to it, never,” resident Olena Rudenko told Reuters.

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Reporting by Reuters reporters
Writing by Peter Graff
Editing by Philippa Fletcher

Our Standards: The Thomson Reuters Trust Principles.

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World

EXCLUSIVE Gazprom says Nord Stream 1 resumption depends on Siemens Energy

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  • Gazprom says ball is in Siemens Energy’s court
  • Siemens Energy: we don’t understand Gazprom
  • Siemens Energy: not commissioned to do maintenance
  • Germany discussing energy rationing
  • Russia: We’ll send our oil to Asia

VLADIVOSTOK, Russia, Sept 6 (Reuters) – Russia’s biggest natural gas pipeline to Europe will not resume pumping until Siemens Energy (ENR1n.DE) repairs faulty equipment, Gazprom’s (GAZP.MM) Deputy Chief Executive Vitaly Markelov told Reuters on Tuesday.

Europe is facing its worst gas supply crisis ever, with energy prices soaring and German importers even discussing possible rationing in the European Union’s biggest economy after Russia reduced flows westwards.

Gazprom (GAZP.MM) on Friday said the Nord Stream 1 pipeline, Europe’s major supply route, would remain shut as a turbine at a compressor station had an engine oil leak, sending wholesale gas prices soaring. read more

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When asked when Nord Stream 1 would start pumping gas again, Markelov told Reuters on the sidelines of the Eastern Economic Forum in the Russian Pacific port of Vladivostok: “You should ask Siemens. They have to repair equipment first.”

Siemens Energy said it was not currently commissioned by Gazprom to do maintenance work on the turbine with the suspected engine oil leak, but was on standby.

The company, headquartered in Munich, Germany, said on Tuesday that it did not comprehend Gazprom’s presentation of the situation.

It said an engine oil leak at the last remaining turbine in operation at the Portovaya compressor station did not constitute a reason to keep the pipeline closed. read more

“We cannot comprehend this new representation based on the information provided to us over the weekend,” Siemens Energy said in a written statement.

“Our assessment is that the finding communicated to us does not represent a technical reason for stopping operation. Such leaks do not normally affect the operation of a turbine and can be sealed on site,” it added.

Pipes at the landfall facilities of the ‘Nord Stream 1’ gas pipeline are pictured in Lubmin, Germany, March 8, 2022. REUTERS/Hannibal Hanschke//File Photo

ENERGY WAR?

The Kremlin blames the energy crisis on sanctions imposed on Russia by the West over what President Vladimir Putin calls its “special military operation” in Ukraine. European leaders say Moscow is using energy to blackmail the EU.

Nord Stream 1, which runs under the Baltic Sea to Germany, is by far the biggest Russian gas pipeline to Europe, carrying up to 59.2 billion cubic metres of gas per year.

Once considered a symbol of the cooperation between one of the world’s biggest energy powers and the world’s fourth largest economy, Nord Stream has now become the subject of recriminations between Berlin and Moscow.

Germany, the biggest European purchaser of Russian energy, says Russia is no longer a reliable supplier. EU politicians say Putin is using his clout as the head of one of the world’s biggest energy powers to stoke discord in Europe over the conflict in Ukraine.

Germany dismisses Gazprom’s explanations about turbine issues as a pretext.

But the Kremlin says that the West triggered the energy crisis by imposing the most severe sanctions in modern history, a step Putin says is akin to a declaration of economic war.

The Kremlin also warned that Russia would retaliate over a G7 proposal to impose a price cap on Russian oil, a step that is unlikely to hurt Russia unless China and India were to follow suit.

Russian Energy Minister Nikolai Shulginov said on Tuesday in Vladivostok that Russia will respond to the price cap by shipping more oil to Asia. He said Russia and its partners were considering setting up an insurer to facilitate the oil trade. read more

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Reporting by Vladimir Soldatkin; Editing by Guy Faulconbridge and Jan Harvey

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Business

EU races to shield industry as Russia gas stoppage shakes markets

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  • European gas price up about 400% on a year ago
  • EU states race to support struggling power firms
  • Disruptions hinder EU efforts to fill storage
  • EU says Moscow weaponised gas, Russia blames sanctions

LONDON/OSLO, Sept 5 (Reuters) – European gas prices surged, stocks slid and the euro sank on Monday after Russia halted gas flows via a major pipeline, sending another shock wave through economies in the region still struggling to recover from the pandemic.

European Union governments are pushing through multi-billion euro packages to prevent utilities buckling under a liquidity squeeze and to protect households from soaring energy bills.

Prices could rise further after Russia’s state-controlled Gazprom said it would stop pumping gas via Nord Stream 1.

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Europe has accused Russia of weaponising energy supplies in retaliation for Western sanctions imposed on Moscow over its invasion of Ukraine. Russia blames those sanctions for causing the gas supply problems, which were down to a pipeline fault.

Many European power distributors have already collapsed and some major generators could be at risk, hit by caps that limit the prices rises they can pass to consumers or caught out by hedging bets, with gas prices now 400% more than a year ago.

Finland aims to offer 10 billion euros ($10 billion) and Sweden 250 billion Swedish crowns ($23 billion) in liquidity guarantees to their power companies.

“The government’s programme is a last-resort financing option for companies that would otherwise be threatened with insolvency,” Finland’s Prime Minister Sanna Marin said.

Utilities often sell power in advance to secure a certain price but must maintain a “minimum margin” deposit in case of default before they supply the power. This has raced higher with surging power prices, leaving companies struggling to find cash.

The benchmark gas price rose as much as 35% at one point on Monday after Gazprom (GAZP.MM) said on Friday a leak in the Nord Stream 1 pipeline’s equipment meant it would stay shut beyond last week’s three-day maintenance halt.

European financial markets reeled on the news, with the euro sinking to a 20-year low and shares tumbling. read more

Nord Stream 1, which runs under the Baltic Sea to Germany, historically supplied about a third of the gas Russia exported to Europe, although it was already running at just 20% of capacity before last week’s maintenance outage.

WESTERN SANCTIONS

“Problems with gas supply arose because of the sanctions imposed on our country by Western states, including Germany and Britain,” Kremlin spokesman Dmitry Peskov said on Monday.

“There are no other reasons that lead to problems with supplies,” Peskov added. read more

Adding to the standoff, he also said Russia would retaliate if G7 states imposed a price cap on Russian oil. read more

Although Russia also sends gas to Europe via pipeline across Ukraine, those supplies have also been reduced during the crisis, leaving the EU racing to find alternative supplies to refill gas storage facilities for winter.

Pipes at the landfall facilities of the Nord Stream 1 gas pipeline are pictured in Lubmin, Germany, March 8, 2022. REUTERS/Hannibal Hanschke

Germany, more reliant than most EU states on Russian gas, has offered a multibillion-euro bailout to power utility Uniper (UN01.DE). Berlin said also it would spend at least 65 billion euros to shield customers and businesses from soaring inflation, stoked by surging energy prices. read more

Berlin said on Monday it plans to keep two of its three remaining nuclear power stations on standby, beyond a year-end deadline to ditch the fuel altogether, to ensure it has enough electricity through the winter.

German Economy Minister Robert Habeck said in a statement on Monday that the move did not mean Berlin was reneging on its long-standing promise to exit nuclear energy by the end of 2022.

Meanwhile, French President Emmanuel Macron said after a call with German Chancellor Olaf Scholz that in the event of energy shortages arising from the Ukraine conflict, Berlin and Paris will support one another. read more

“Germany needs our gas and we need power from the rest of Europe, notably Germany,” Macron told a news briefing.

And Ukraine’s Prime Minister Denys Shmyhal urged the EU to supply Kyiv with more weapons, while offering to help out with gas deliveries to reduce the bloc’s dependence on Russia, which supplied around 155 bcm of gas to Europe last year.

RECESSION FEARS

Some energy-intensive industries in Europe, such as fertiliser makers and aluminium producers, have already scaled back production. Other industries, already grappling with chip shortages and logistics logjams, face rocketing fuel bills.

Several EU states have triggered emergency plans that could lead to energy rationing and fuelling recession fears, with inflation soaring and interest rates on the rise.

“We cannot rule out that Germany might look at rationing gas,” Uniper Chief Executive Klaus-Dieter Maubach told Reuters on the sidelines of the Gastech conference in Milan.

Germany, which is installing liquefied natural gas (LNG) terminals so it can ship in fuel and expand its range of global suppliers, is at phase two of a three-stage emergency gas plan. Phase three would see some industry rationing. read more

German households will be prioritised in the event of the plan being activated but will not be able to heat swimming pools or saunas, the energy regulator said on Monday.

The global market for LNG was already tight as the world economy sucked up supplies in the recovery from the pandemic. The Ukraine crisis has added further demand.

Norway, a major European producer, has been pumping more gas into European markets but cannot fill the gap left by Russia.

EU countries’ energy ministers are due to meet on Sept. 9 to discuss options to rein in soaring energy prices including gas price caps and emergency credit lines for energy market participants, a document seen by Reuters showed. read more

Klaus Mueller, president of Germany’s Federal Network Agency energy regulator, said in August that even if its gas stores were 100% full, they would be empty in 2-1/2 months if Russian gas flows were halted completely.

Germany’s storage facilities are now about 85% full, while facilities across Europe hit an 80% target last week.

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Reporting by Susanna Twidale in London, Nora Buli in Oslo, Supantha Mukherjee in Stockholm and Essi Lehto in Helsinki; Writing by Edmund Blair and Alexander Smith; Editing by Mark Potter and Carmel Crimmins

Our Standards: The Thomson Reuters Trust Principles.

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