ISLAMABAD, Jan 23 (Reuters) – Pakistan’s government began restoring power to millions of people on Monday after a breakdown in the grid triggered the worst electricity outage in months and highlighted the weak infrastructure of the heavily indebted nation.
An inquiry has been launched into the outage, which began at around 7:00 a.m. local time (0200 GMT) and has so far lasted more than 12 hours during the peak winter season.
As evening drew on and homes were without electricity in the dark, Energy Minister Khurram Dastgir wrote on Twitter that authorities had started restoring power across the country.
Dastgir had told reporters earlier: “We have faced some hurdles but we will overcome these hurdles, and will restore the power.”
The outage, which the minister had said was due to a voltage surge, is the second major grid failure in three months, and adds to the blackouts that Pakistan’s nearly 220 million people suffer on an almost-daily basis.
Power was beginning to return in parts of the capital Islamabad and the southwest province of Balochistan, said Dastgir.
Pakistan’s largest city and economic hub Karachi is likely to see electricity restored in the next three to four hours, a spokesperson for K-Electric Ltd (KELE.PSX), the southern city’s power provider, said.
[1/5] A man sits outside his shop during a country-wide power breakdown in Karachi, Pakistan January 23, 2023. REUTERS/Akhtar Soomro
Analysts and officials blame the power problems on an ageing electricity network, which like much of the national infrastructure, desperately needs an upgrade that the government says it can ill afford.
The International Monetary Fund has bailed out Pakistan five times in the last two decades. Its latest bailout tranche, however, is stuck due to differences with the government over a programme review that should have been completed in November.
Pakistan has enough installed power capacity to meet demand, but it lacks resources to run its oil-and-gas powered plants. The sector is so heavily in debt that it cannot afford to invest in infrastructure and power lines. China has invested in its power sector as part of a $60 billion infrastructure scheme that feeds into Beijing’s “Belt and Road” initiative.
“We have been adding capacity, but we have been doing so without improving transmission infrastructure,” said Fahad Rauf, head of research at Karachi brokerage Ismail Iqbal Industries.
The outage occurred on a winter’s day where temperatures are forecast to fall to around 4 degrees Celsius (39°F) in Islamabad and 8 degrees Celsius (46°F) in Karachi.
Many people also have no running water due to a lack of power for the pumps.
Earlier, Dastgir told Reuters the grid should be fully functioning by 10:00 p.m. (1700 GMT).
The outage hit Internet and mobile phone services. Several companies and hospitals said they had switched to back-up generators, but disruptions continued across the board.
Reporting by Asif Shahazad, Ariba Shahid and Gibran Naiyyar Peshimam, additional reporting by Jibran Ahmad in Peshawar and Mubasher Bukhari in Lahore and Charlotte Greenfield in Kabul; writing by Shilpa Jamkhandikar, Miral Fahmy and Shivam Patel; editing by Sudipto Ganguly, Simon Cameron-Moore and Bernadette Baum
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LONDON, Jan 23 (Reuters) – Britain’s National Grid (NG.L) said it would pay customers to use less power on Monday evening and that it had asked for three coal-powered generators to be warmed up in case they are needed as the country faces a snap of cold weather.
The group said that it would activate a new scheme called the Demand Flexibility Service where customers get incentives if they agree to use less power during crunch periods.
The service, which has been trialled but not run in a live situation before, would run from 5 p.m. to 6 p.m. on Monday, it said, adding that the move did not mean electricity supplies were at risk and advised people not to worry.
The measures were announced in order to “ensure that everyone gets the electricity they need,” Craig Dyke, Head of National Control at National Grid ESO, told BBC Radio on Monday, adding that 26 suppliers had signed up for the scheme.
[1/2] A British government advert offering people help with winter energy bills is seen on the side of a bus in Stockport, Britain, November 16, 2022. REUTERS/Phil Noble
Below freezing temperatures have been recorded across much of the UK in recent days with the national weather service, the Met Office, last week issuing severe weather warnings for snow and ice.
National Grid’s Dyke said consumers could make small changes to make money by reducing their energy usage, such as delaying cooking or putting on the washing machine until after 6 p.m.
National Grid said in December that over a million British households had signed up to the scheme, which is one of its strategies to help prevent power cuts.
The announcement about the coal-powered generators did not mean they would definitely be used, it said in a separate statement.
Coal-powered generators were last put on stand-by in December when temperatures dropped and demand for energy rose, but they were not needed on that occasion.
Reporting by William Schomberg and Muvija M in London, and Sneha Bhowmik in Bengaluru; editing by Tomasz Janowski, Andrew Heavens, Kirsten Donovan
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LUETZERATH, Germany, Jan 11 (Reuters) – Hundreds of police began clearing climate protesters out of an abandoned village on Wednesday in a showdown over the expansion of an opencast lignite mine that has highlighted tensions around Germany’s climate policy during an energy crisis.
The protesters formed human chains, made a makeshift barricade out of old containers and chanted “we are here, we are loud, because you are stealing our future” as police in helmets moved in. Some threw rocks, bottles and pyrotechnics. Police also reported protesters were lobbing petrol bombs.
The demonstrators, wearing masks, balaclavas or biosuits, have been protesting against the Garzweiler mine, run by energy firm RWE (RWEG.DE) in the village of Luetzerath in the brown-coal district of the western state of North Rhine-Westphalia.
Climate activist Greta Thunberg plans to join the demonstration on Saturday, a spokesperson for Luetzerathlebt environmentalist group told Reuters.
Economy Minister Robert Habeck of the Greens called for no further violence after police and protesters scuffled.
“Leave it at that – from both sides,” he told reporters.
Police say the standoff could take weeks to resolve.
As the officers moved in, some activists perched on the roofs or the windows of the abandoned buildings, chanting and shouting slogans.
Others hung suspended from wires and wooden frames, or were holed up in treehouses to make it harder for police to dislodge them after a court ruling allowed for the demolition of the village now otherwise empty of residents and owned by RWE.
Julia Riedel, who said she has been camping in the village for two-and-a-half years, said the demonstrators had taken up their positions “because the issue here is whether the climate will cross the tipping point or not.”
Police, who had water cannon trucks on standby, led away and carried some protesters from the site.
The project has underscored Germany’s dilemma over climate policy, which environmentalists say has taken a back seat during the energy crisis that has hit Europe after Russia’s invasion of Ukraine, forcing a return to dirtier fuels.
It is particularly sensitive for the Greens party, now back in power as part of Chancellor Olaf Scholz’s coalition government after 16 years in opposition. Many Greens oppose the mine’s expansion, but Habeck has been the face of the government’s decision.
[1/14] Police officers keep guard as activists stage a sit-in protest against the expansion of the Garzweiler open-cast lignite mine of Germany’s utility RWE, in Luetzerath, Germany, January 11, 2023 that has highlighted tensions over Germany’s climate policy during an energy crisis. REUTERS/Thilo Schmuelgen
“The empty settlement of Luetzerath, where no one lives any more, is the wrong symbol in my view,” Habeck said with reference to the demonstration.
HEAVY MACHINERY
Birte, a 51-year-old midwife who joined the protest on Sunday, was in tears as police led her away.
She said it was important for politically moderate citizens to attend the protest, to show “that these are not just young, crazy, violent people, but that there are people who care”.
Police have urged the protesters to leave the area and remain peaceful.
“It’s a big challenge for the police and we need a lot of special forces here to deal with the situation. We have aerial rescue specialists,” said police spokesperson Andreas Mueller.
“These are all factors that make it difficult to tell how long this will last. We expect it to continue for a least several weeks.”
A Reuters eyewitness saw police using heavy machinery to start dismantling high barricades.
RWE said earlier on Wednesday it would start to dismantle Luetzerath, and had begun building a fence around the area.
“RWE is appealing to the squatters to observe the rule of law and to end the illegal occupation of buildings, plants and sites belonging to RWE peacefully,” RWE said.
The fallout of Russia’s invasion of Ukraine has prompted Scholz’s government to change course on previous policies.
Those include firing up mothballed coal power plants and extending the lifespan of nuclear power stations after Russia cut gas deliveries to Europe in an energy standoff that sent prices soaring.
The government has, however, brought forward the date when all brown coal power plants will be shut down in North Rhine-Westphalia, to 2030 from 2038, acceding to a campaign promise from the Greens.
Writing by Paul Carrel and Matthias Williams; Editing by Tom Hogue, Christopher Cushing, Conor Humphries and Alison Williams
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Dec 23 (Reuters) – Frigid cold and blowing winds on Friday knocked out power and cut energy production across the United States, driving up heating and electricity prices as people prepared for holiday celebrations.
Winter Storm Elliott brought sub-freezing temperatures and extreme weather alerts to about two-thirds of the United States, with cold and snow in some areas to linger through the Christmas holiday.
More than 1.5 million homes and businesses lost power, oil refineries in Texas cut gasoline and diesel production on equipment failures, and heating and power prices surged on the losses. Oil and gas output from North Dakota to Texas suffered freeze-ins, cutting supplies.
Some 1.5 million barrels of daily refining capacity along the U.S. Gulf Coast was shut due to the bitterly cold temperatures. The production losses are not expected to last, but they have lifted fuel prices.
Knocked out were TotalEnergies (TTEF.PA), Motiva Enterprises (MOTIV.UL) and Marathon Petroleum (MPC.N) facilities outside Houston. Cold weather also disrupted Exxon Mobil (XOM.N), LyondellBasell (LYB.N) and Valero Energy (VLO.N) plants in Texas that produce gasoline, diesel and jet fuel.
Sempra Infrastructure’s Cameron LNG plant in Louisiana said weather disrupted its production of liquefied natural gas without providing details. Crews at the 12 million tonne-per-year facility were trying to restore output, it said.
Freeze-ins – in which ice crystals halt oil and gas production – this week trimmed production in North Dakota’s oilfields by 300,000 to 350,000 barrels per day, or a third of normal. In Texas’s Permian oilfield, the freeze led to more gas being withdrawn than was injected, said El Paso Natural Gas operator Kinder Morgan Inc. (KMI.N).
U.S. benchmark oil prices on Friday jumped 2.4% to $79.56, and next-day gas in west Texas jumped 22% to around $9 per million British thermal units , the highest since the state’s 2021 deep freeze.
Power prices on Texas’s grid also spiked to $3,700 per megawatt hour, prompting generators to add more power to the grid before prices fell back as thermal and solar supplies came online.
New England’s bulk power supplier said it expected to have enough to supply demand, but elsewhere strong winds led to outages largely in the Southeast and Midwest; North Carolina counted more than 187,000 without power.
“Crews are restoring power but high winds are making repairs challenging at most of the 4,600 outage locations,” Duke Energy spokesman Jeff Brooks wrote on Twitter.
Heating oil and natural gas futures rose sharply in response to the cold. U.S. heating oil futures gained 4.3% while natural gas futures rose 2.5%.
In New England, gas for Friday at the Algonquin hub soared 361% to a near 11-month high of $30 mmBtu.
About half of the power generated in New England comes from gas-fired plants, but on the coldest days, power generators shift to burn more oil. According to grid operator New England ISO, power companies’ generation mix was at 17% from oil-fired plants as of midday Friday.
Gas output dropped about 6.5 billion cubic feet per day (bcfd) over the past four days to a preliminary nine-month low of 92.4 bcfd on Friday as wells froze in Texas, Oklahoma, North Dakota, Pennsylvania and elsewhere.
That is the biggest drop in output since the February 2021 freeze knocked out power for millions in Texas.
One billion cubic feet is enough gas to supply about 5 million U.S. homes for a day.
Reporting by Erwin Seba and Scott DiSavino; additional reporting by Arathy Somasekhar and Laila Kearney; editing by Jonathan Oatis, Kirsten Donovan, Aurora Ellis and Leslie Adler
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Scott Disavino
Thomson Reuters
Covers the North American power and natural gas markets.
Nov 28 (Reuters) – Bitfront, a U.S. crypto exchange backed by Japanese social media firm Line Corp, said it has suspended new sign-ups and credit card payments and will cease operations in a few months despite efforts to overcome challenges in the rapidly evolving industry.
“However, despite our efforts … we have regretfully determined that we need to shut down BITFRONT in order to continue growing the LINE blockchain ecosystem and LINK token economy,” the California-based company said in a statement on its website on Sunday.
Bitfront said the move is unrelated to recent issues among certain crypto exchanges that have been accused of “misconduct”.
FTX, which was among the world’s largest cryptocurrency exchanges, is now the subject of investigations by authorities for “criminal misconduct”.
The company had filed for bankruptcy earlier this month, while cryptocurrency lender BlockFi filed for Chapter 11 bankruptcy protection on Monday, hurt by exposure to the collapse of FTX.
Bitfront said it has suspended new sign-ups and credit card payments as of Nov. 28, and will suspend withdrawals on March 31, 2023. The company clarified that interest for deposits made between Dec. 5 and Dec. 11 will be paid out on Dec. 13, 2022.
Reporting by Rahat Sandhu and Maria Ponnezhath in Bengaluru; Editing by Sherry Jacob-Phillips
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PARIS, Oct 18 (Reuters) – Regional train traffic in France was cut by about half on Tuesday as several unions called a nationwide strike, seeking to capitalise on anger with decades-high inflation to expand a weeks-long industrial action at oil refineries to other sectors.
There were also some disruption to schools, as the strike primarily affected the public sector.
Trade union leaders were hoping workers would be energised by the government’s decision to force some of them to go back to work at petrol depots to try and get fuel flowing again, a decision some say put in jeopardy the right to strike.
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But a survey by Elabe pollsters for BFM TV showed only 39% of the public backed Tuesday’s call for a nationwide strike, while 49% opposed it, and growing numbers opposed the strike by oil refinery workers.
The refinery workers’ strike has become one of President Emmanuel Macron’s stiffest challenges since his re-election in May.
Government spokesperson Olivier Veran said the requisition of more staff for refineries could occur during the day, as queues of motorists worried about supply disruption grow at petrol stations.
“There will be as many requisitions as deemed necessary … Blocking refineries, when we have reached an agreement on wages, this is not a normal situation,” Veran told France 2 TV.
French students block the entrance of the Lycee Montaigne high school to protest as part of a nationwide day of strike in Paris, France, October 18, 2022. REUTERS/Gonzalo Fuentes
Just under 10% of high school teachers were on strike on Tuesday, with numbers even lower in primary schools, education ministry data showed. The call for strike was most observed in vocational schools, where teachers oppose planned reforms.
On the transport front, Eurostar said it was cancelling some trains between London and Paris because of the strike.
French public railway operator SNCF said that traffic on regional connections was down 50% but that there were no major disruptions to national lines.
As tensions rise in the euro zone’s second-biggest economy, strikes have spilled over into other parts of the energy sector, including nuclear giant EDF (EDF.PA), where maintenance work crucial for Europe’s power supply will be delayed.
A representative of the FNME-CGT union on Tuesday said strikes were affecting work at nuclear power plants, including at the Penly plant.
The strikes are happening as the government is set to pass the 2023 budget using special constitutional powers that would allow it to bypass a vote in parliament, Prime Minister Elisabeth Borne said on Sunday.
Demonstrations are scheduled all over the country, with one in Paris from 1200 GMT.
Thousands of people took to the streets of Paris on Sunday to protest against soaring prices. The leader of hard-left La France Insoumise (France Unbowed) party, Jean-Luc Melenchon, marched alongside this year’s Nobel Prize winner for Literature, Annie Ernaux.
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Additional reporting by Ingrid Melander, Forrest Crellin and Juliette Jabkhiro; Editing by Angus MacSwan and Gerry Doyle
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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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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
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Outage for maintenance on Nord Stream 1 pipeline
No flows to Germany 0100 GMT, Aug. 31 – 0100 GMT, Sept. 3
European governments fear Moscow could extend the outage
German regulator: we are saving gas, must keep doing so
Siemens Energy: not involved in maintenance work
FRANKFURT/LONDON, Aug 31 (Reuters) – Russia halted gas supplies via Europe’s key supply route on Wednesday, intensifying an economic battle between Moscow and Brussels and raising the prospects of recession and energy rationing in some of the region’s richest countries.
European governments fear Moscow could extend the outage in retaliation for Western sanctions imposed after it invaded Ukraine and have accused Russia of using energy supplies as a “weapon of war”. Moscow denies doing this and has cited technical reasons for supply cuts.
Russian state energy giant Gazprom (GAZP.MM) said Nord Stream 1, the biggest pipeline carrying gas to its top customer Germany, will be out for maintenance from 0100 GMT on Aug. 31 to 0100 GMT on Sept. 3. read more
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The president of the German network regulator said that Germany would be able to cope with the three-day outage as long as flows resumed on Saturday.
“I assume that we will be able to cope with it,” Klaus Mueller told Reuters TV in an interview. “I trust that Russia will return to at least 20% from Saturday, but no one can really say.”
Further restrictions to European gas supplies would deepen an energy crunch that has already triggered a 400% surge in wholesale gas prices since last August, squeezing consumers and businesses and forcing governments to spend billions to ease the burden. read more
In Germany, inflation soared to its highest in almost 50 years in August and consumer sentiment soured as households brace for a spike in energy bills. read more
LOWER SUPPLIES
Unlike last month’s 10-day maintenance for Nord Stream 1, the latest work was announced less than two weeks in advance and is being carried out by Gazprom rather than its operator.
Moscow, which slashed supply via the pipeline to 40% of capacity in June and to 20% in July, blames maintenance issues and sanctions it says prevent the return and installation of equipment.
Kremlin spokesman Dmitry Peskov said on Wednesday that Russia remained committed to its gas supply obligations, but was unable to fulfil them due to the sanctions, according to the Interfax news agency.
Gazprom said the latest shutdown was needed to perform maintenance on the pipeline’s only remaining compressor at the Portovaya station in Russia, saying the work would be carried out jointly with Siemens specialists.
Pipes at the landfall facilities of the ‘Nord Stream 1’ gas pipeline are pictured in Lubmin, Germany, March 8, 2022. REUTERS/Hannibal Hanschke
Siemens Energy (ENR1n.DE), which has carried out maintenance work on compressors and turbines at the station in the past, said on Wednesday it was not involved in the maintenance but stood ready to advise Gazprom if needed. read more
Russia has also stopped supplying Bulgaria, Denmark, Finland, the Netherlands and Poland, and reduced flows via other pipelines since launching what Moscow calls its “special military operation” in Ukraine. read more
Gazprom said on Tuesday it would also suspend gas deliveries to its French contractor because of a payments dispute, which France’s energy minister called an excuse, but added that the country had anticipated the loss of supply. read more
German Economy Minister Robert Habeck, on a mission to replace Russian gas imports by mid-2024, earlier this month said Nord Stream 1 was “fully operational” and there were no technical issues as claimed by Moscow.
‘ELEMENT OF SURPRISE’
The reduced flows via Nord Stream have complicated efforts across Europe to save enough gas to make it through the winter months, when governments fear Russia may halt flows altogether.
“It is something of a miracle that gas filling levels in Germany have continued to rise nonetheless,” Commerzbank analysts wrote, noting the country has so far managed to buy enough at higher prices elsewhere.
In the meantime, some Europeans are voluntarily cutting their energy consumption, including limiting their use of electrical appliances and showering at work to save money while companies are bracing for possible rationing. read more
With storage tanks filled in 83.65%, Germany is already close to its 85% target set for Oct. 1, but it has warned reaching 95% by Nov. 1 would be a stretch unless companies and households slash consumption.
European Union as a whole reached 80.17% of its storage capacity, already ahead of the 80% target set for Oct. 1, when the continent’s heating season starts.
Analysts at Goldman Sachs said their base scenario was that the latest Nord Stream 1 outage would not be extended.
“If it did, there would be no more element of surprise and reduced revenues, while low flows and the occasional drop to zero have the potential to keep market volatility and political pressure on Europe higher,” they said.
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Reporting Nina Chestney and Christoph Steitz; Additional reporting by Matthias Inverardi, Bharat Govind Gautam and Eileen Soreng; Editing by Veronica Brown, Carmel Crimmins, Lincoln Feast and Tomasz Janowski
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Nina Chestney
Thomson Reuters
Oversees and coordinates EMEA coverage of power, gas, LNG, coal and carbon markets and has 20 years’ experience in journalism. Writes about those markets as well as climate change, climate science, the energy transition and renewable energy and investment.
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Gazprom lowers supply to France’s Engie on Tuesday
Nord Stream 1 pipeline to be shut for three days for maintenance
European energy ministers to hold emergency meeting on Sept. 9
Europe front-month gas contract hit all-time highs last week
PARIS, Aug 30 (Reuters) – France accused Moscow on Tuesday of using energy supplies as “a weapon of war” after Russia’s Gazprom (GAZP.MM) cut deliveries to a major French customer and said it would shut its main gas pipeline to Germany for three days this week.
European governments are trying to coordinate a response to soaring energy costs for businesses and households and to fill storage facilities ahead of peak demand in the winter.
Western nations fear that Moscow is deliberately driving up gas prices to try to weaken their opposition to its invasion of Ukraine, a tactic Ukrainian President Volodymyr Zelenskiy on Monday dubbed “economic terrorism”. Moscow denies the charge.
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Nord Stream 1, the main conduit for Russian gas into Europe, has become a flash point in the dispute. Europe faces a further squeeze on supplies this week as Gazprom shuts off the pipeline for maintenance from Wednesday till the early hours of Saturday.
Kremlin spokesman Dmitry Peskov said on Tuesday technological problems caused by Western sanctions on Russia are the only thing standing in the way of supplying gas via Nord Stream 1.
But France’s Energy Transition Minister Agnes Pannier-Runacher said: “Very clearly Russia is using gas as a weapon of war and we must prepare for the worst case scenario of a complete interruption of supplies.”
She was speaking to France Inter radio after French utility Engie (ENGIE.PA) said it would receive less gas from Gazprom from Tuesday because of an unspecified contractual dispute. read more
Russia has been pumping gas via Nord Stream 1 at only 20% of capacity and there are fears that this week’s outage could be extended.
FILE PHOTO: Warning signs are pictured in front of the gas compressor station, a part of Polish section of the Yamal pipeline that links Russia with western Europe which is owned by a joint venture of Gazprom and PGNiG but it is operated by Poland’s state-owned gas transmission company Gaz-System, in Gabinek near Wloclawek, Poland May 23, 2022. The signs read: “Attention! Explosion risk. Zone 2” and “Natural gas. Keep fire away.” REUTERS/Kacper Pempel//File Photo
Asked if there are guarantees that Gazprom will restart gas flows via Nord Stream 1, the Kremlin’s Peskov said: “There are guarantees that, apart from technological problems caused by sanctions, nothing hinders the supplies.” read more
‘INSANE PRICES’
EU energy ministers will hold an emergency meeting on Sept. 9 to discuss the crisis.
Germany, Europe’s largest economy, is open to discussing a price-cap scheme on gas supplies at a European level, a source in Italy said, citing a text message Germany’s economy minister sent to his colleagues across the bloc. read more
The source said Robert Habeck sent a message to EU energy ministers flagging that Berlin was open to discuss the price cap at next week’s meeting.
Italian Prime Minister Mario Draghi has been pushing for a price cap, and has also called for steps to decouple the cost of electricity from the gas price. Such a move would allow European households to get the benefits from electricity produced from cheaper sources such as renewables.
The chief executive of German energy firm Wintershall Dea said on Tuesday that current price levels meant demand for gas would fall in the long term.
“The prices we are having currently are insane. That is nothing even a gas producer is looking for because in the end, we are going to massively destroy demand for our product,” Mario Mehren told reporters on the sidelines of a conference in Norway.
Benchmark Dutch wholesale gas prices rose on Tuesday afternoon after an initial retreat. The front-month gas contract was up 1.5% at 271 euros/MWh, off all-time highs hit last week but still trading at levels more than five times those seen a year ago.
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Reporting by Dominique Vidalon and Richard Lough in Paris, Giuseppe Fonte in Rome, Federico Maccioni in Milan, Holger Hansen in Berlin, Susanna Twidale in London, Vera Eckert in Frankfurt and Nora Buli in Stavanger
Writing by Keith Weir; editing by Jason Neely, Angus MacSwan and Gareth Jones
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