Will Russia reopen its gas pipeline to Germany?

Will Russia restart gas deliveries through Nord Stream 1, its most important pipeline to Germany — or not? A statement made by Russian President Vladimir Putin this week gave an indication of where things could be headed: Due to "slow progress in maintenance," the delivery volume could be reduced further," he said during a visit to Tehran on Tuesday.

Putin explained that a total of five Siemens Energy gas pumping turbines operated within Nord Stream 1. He said that one was out of order due to "crumbling of the inner lining," another was already undergoing maintenance and servicing of a third turbine would begin on July 26. Each turbine pumps 30 million cubic meters of gas per day, he said. If they do not operate, the total amount of gas is reduced accordingly, he said, adding there was nothing the Russian energy giant Gazprom could do about that.

On Wednesday, the website for Nord Stream 1 showed that some gas had flowed, but only for two hours.

Traveling turbine

The Russian president has blamed the West and the sanctions imposed on Russia for the supply problems. Maintenance of the Siemens-built turbines is conducted at a plant in Canada, and Ottawa had initially blocked the return of one turbine because of the sanctions. Consequently, Kremlin-controlled energy giant Gazprom reduced gas exports through Nord Stream to 40% of normal capacity in late May, and again more drastically in mid-June.

However, after pressure from Germany, Canada agreed to return the turbine. It was due to leave Canada for Germany, from where it would have been sent on to Russia — using a loophole, as "on the EU side such transports are not affected by the sanctions," as a spokesperson for the German Economy Ministry explained on Monday.

The German government has kept the exact details of the transport under wraps, citing security issues. But in Brussels, European Commission President Ursula von der Leyen insisted that the turbine was on its way, would arrive on time and that there was no reason for Russia not to resume supplies. The Russian newspaper Kommersant also reported that the turbine had been flown to Germany over the weekend and would be en route to Russia for another five to seven days. Accordingly, it should arrive this weekend.

Anxious look to the east

In Germany, there is significant concern that Moscow could continue restricting gas supplies or stop them altogether, citing maintenance work as a reason.

"According to everything we have been told by technical experts, this turbine has been used as a pretext so far," said the Economy Ministry spokesperson. "This turbine in question was intended as a replacement for a turbine that needs to be swapped out in September. But once again, we are doing all we can to make sure the Russian side has no pretext to curb the flow of gas."

At the same time, the German government is scrambling to prepare in case Russia does not ramp up the supply volume to the contractually agreed normal level. After all, Moscow has no political interest in doing so, as the president of Germany's Federal Network Agency, Klaus Müller, said. He also pointed out that Russia could also increase its supply volumes at any time via other pipelines, for example through Ukraine, but had so far chosen not to do that.

Who would be affected by a gas cut?

Most likely, the Kremlin will delay gas deliveries through Nord Stream 1. But nobody in Germany can predict for how long. On its Telegram channel, Gazprom recently said Siemens had not transferred certain important documents that would allow it to install the turbine under the conditions of the sanctions imposed by Canada and the EU.

If the gas supply is cut off completely, there will be a serious shortage in Germany and decisions will have to be made as to who gets how much.

Since private households, hospitals, schools, and care homes are protected by law, it is mainly industry that will be affected by an eventual supply freeze. Opinions differ on how this might affect the economy. It will also depend on how consumption by private households develops, how much energy European partners can supply to Germany and how quickly the country is able to complete construction of new liquefied natural gas (LNG) terminals.

Savings potential

According to the Brussels-based think tank Bruegel, a complete halt in supplies from Russia would result in a shortfall of 30% of the gas used in Germany. The Federal Association of Energy and Water Industries in Germany said that because of the reduced volume in June, only 26% of the gas used in Germany actually came from Russia. And in July so far that amount has gone down to below 10%. But the situation will change when the summer is over and people turn on the heat.

Economist Rüdiger Bachmann, a professor at Notre Dame University in Indiana, estimates that one LNG terminal can provide about 5% of Germany's overall gas demand. In an interview with DW, Bachmann also said that replacing gas-fired electricity generation with coal-fired power plants would make a noticeable difference.

Furthermore, the German government is still discussing the pros and cons of the continued operation of nuclear power plants.

Not a cozy winter

"So we still have some cards up our sleeve," said Bachmann. "The chemical industry has said it could just about make do if gas consumption was reduced by 50%. That would not involve shutting down anything that would then be irreversibly broken."

As to private households, he said that a heating reduction of even 1 degree would  "hugely" decrease demand for gas.

"It's not going to be a nice winter, but we have to prepare for that now."

In any case, he said, if Russia does not ramp up its gas supplies again, gas will become much more expensive. Low-income households will not be able to pay exploding heating costs, and even the middle class will hardly be able to cope.

"An increased gas price means an impoverishment of society, a poorer society," he warned, saying that politicians had to take action to protect the less affluent.

In such a scenario, he explained, politicians would have to determine who ultimately had to bear the burden. "In my opinion, that can only be the strong shoulders in society, for example, high-income earners like me and my fellow professors."

In Gazprom's interest to deliver

With all that said, the question is whether Russia can actually afford to turn off the gas tap completely. The country's economy is in crisis, and the Kremlin needs money from its exports to continue financing its war against Ukraine. Moreover, cutting off supplies would be a breach of contract and an admission that Russia is using its energy supplies as a political weapon.

While he has hinted at delays, Putin has also made reassuring comments, for example: "Gazprom fulfills its obligations, has always fulfilled them and is willing to continue to fulfill all its obligations."

Moreover, to be anything other than reliable might send out the wrong signal to other customers such as China or India, which are currently expanding their business with Russia.

This article was originally written in German.

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