Seeking leverage over Europe, Vladimir Putin says Russian gas flow will resume

Pipes at the landfall facilities of the 'Nord Stream 1' gas pipline in Lubmin (Image: Reuters)

BERLIN — When the main natural gas artery between Russia and Germany, the Nord Stream 1 pipeline, was taken offline last week for 10 days of scheduled maintenance, European leaders began bracing for the possibility that President Vladimir Putin of Russia would not switch it back on as retaliation for opposing Moscow’s invasion of Ukraine.

But Putin has suggested that the gas will resume flowing to Europe after the work on the pipeline — controlled by Russia’s state-owned energy giant Gazprom — finishes Thursday, though he warned that supplies might be further curtailed.

The European Commission called on the bloc’s 27 members to immediately begin taking steps to reduce gas consumption by 15 percent. “Russia is blackmailing us. Russia is using energy as a weapon,” Ursula von der Leyen, president of the commission, told reporters in Brussels on Wednesday.

But analysts have pointed out that if Russia ceased gas flows to Europe, the country would lose an element of leverage in the economic battle it has waged against the continent since the invasion of Ukraine, allowing Putin to exert control over supplies and prices.

Speaking to reporters late Tuesday in Tehran, Iran, after meeting with the leaders of Iran and Turkey, Putin warned that Gazprom would send only “half of the volume intended” through the Nord Stream pipeline. Before it was shut down July 11 for maintenance, flows had already been reduced to 40 percent of capacity.

Maintaining such a reduced flow of natural gas could be advantageous to the Russian leader, analysts said, allowing him to keep Europeans in a protracted state of uncertainty and near panic. Russia has already ceased gas deliveries through other major pipelines to Europe that cross Poland and Ukraine.

“To the extent that Putin maintains some gas flows on Nord Stream 1, he enjoys both income and leverage,” said David Goldwyn, a former senior State Department energy diplomat who served in the first term of the Obama administration. “Once he cuts off supply, he loses both, and there is no turning back.”

European gas prices have soared to three or four times those of a year ago, causing a jump in inflation and raising concerns over social unrest once temperatures begin to drop.

The European Union imported 45 percent of its natural gas from Russia last year. That fell to only 28 percent in the first three months of this year. At the same time, overall gas imports in the bloc increased, driven largely by a 72 percent jump in purchases of liquefied natural gas.

Gazprom has blamed reduced flows through Nord Stream on a turbine that was sent to Montreal for repairs and could not be returned because of sanctions against Russia. German officials disputed Gazprom’s claim that the turbine could have caused such a cut in flows.

Since then, the German government has secured the return of the equipment, which was made and repaired by Siemens Energy at a plant in Canada. But Putin said that another one of the turbines in the six compressors near Russia’s Baltic Sea coast was now in need of refurbishing and indicated there were also problems with several others.

“If one more comes, then it’s good; two will work. And if it does not come, there will be one; it will be only 30 million cubic meters per day,” he told reporters. That is less than 20 percent of the pipeline’s capacity of 160 million cubic meters of gas a day, or 5,600 million cubic feet.

Records on a Nord Stream website indicated that a tiny amount of gas flowed through the pipeline Tuesday afternoon, in an apparent test. A site run by the Gascade network provider showed that capacity had been booked through Nord Stream for Thursday. These are not guarantees that the gas will flow, but it could indicate Russia’s continued interest in piping gas to Europe.

Eswar Prasad, an economist at Cornell University, said keeping a low flow through Nord Stream could strengthen Russia’s position and even weaken Europe’s resolve if the war dragged on.

“Maintaining Europe’s energy dependency on Russia and stoking uncertainty about natural gas supplies, which can only help in boosting prices,” he said, are among the reasons Putin would want to keep Nord Stream online. There is the added attraction, Prasad said, of being able “to some extent control Europe’s economic destiny.”

But a return of flows from Russia this week is no guarantee that they will continue in the future or be sufficient for Germany and its European partners to meet their goals to fill gas storage tanks to 80 percent capacity by the beginning of November. In Germany, where half the homes are heated by natural gas and the fuel is necessary for the chemical, steel and paper industries, storage levels reached 65 percent by Wednesday — just above the European average.

This week, von der Leyen travelled to Azerbaijan to secure a deal to double the imports of Azeri natural gas to at least 20 billion cubic meters (706 billion cubic feet) a year by 2027 as part of efforts across Europe to secure gas from sources beyond Russia.

Germany has turned to the Netherlands and Norway for more gas, as well as buying more liquefied natural gas from the United States and Qatar. But none of Europe’s 26 LNG terminals, which are needed to convert the gas from its deep-chilled state back into a gas, are in Germany.

Robert Habeck, Germany’s economy minister and vice chancellor, has secured 2.94 billion euros to rent four floating LNG terminals. The first are scheduled to be in operation by year’s end.

But if Europe faces an unusually cold winter, that might not be soon enough to ensure that Germany keeps its homes heated and factories running. Germany has already activated two steps of a three-stage “gas emergency” plan, bringing back coal-fired power plants to replace those run by gas and running through scenarios of what would happen if the gas is cut off entirely.

To some observers, the panic of recent weeks is exactly what Putin wants.

“Will he give us gas? Will he cut the flow? Europe is hanging on Putin’s lips again,” Janis Kluge, an analyst on Russia with the German Institute for International and Security Affairs in Berlin, wrote on Twitter. “However the Nord Stream 1 saga continues, he is definitely loving every part of it.”