Since the Nord Stream explosion, European natural gas prices have risen sharply in next day, with the Dutch TTF, a European gas benchmark, increasing more than 10% in response to the explosions and leaks detected on the Nord Stream 1 and 2 pipelines under the Baltic Sea . However, since that day, the Dutch TTF prices are fallen.
The explosions led to concerns about Europe’s energy security ahead of winter, and many countries were forced to look for alternative sources of gas, which could be more expensive and less reliable than Russian gas . The attacks are seen by some officials across Europe as deliberate, while others have not ruled out the possibility of sabotage . Meanwhile, Russian President Vladimir Putin has blamed the United States and its allies for blowing up the pipelines, which was dismissed by the White House . European natural gas prices have also been affected by a spat between Russia and Ukraine over gas transit, which has further raised concerns about the security of gas supplies to Europe .
Nord Stream is a natural gas pipeline that runs from Russia to Germany, passing through the Baltic Sea. It is a joint venture between Russian gas company Gazprom and several European energy companies, including Germany’s Wintershall and E.ON, France’s ENGIE, the Netherlands’ Gasunie, and Austria’s OMV. The pipeline has two parallel lines, each with a capacity of 55 billion cubic meters of natural gas per year, which makes it a significant source of natural gas for Germany and other European countries. The pipeline has been controversial due to concerns about European dependence on Russian energy, as well as its potential impact on European energy security, and environmental issues related to the construction of the pipeline.
What are the differences between Nord Stream 1 and Nord Stream 2?
Nord Stream 1 and Nord Stream 2 are two separate pipelines that are part of the Nord Stream network of offshore natural gas pipelines that run from Russia to Germany under the Baltic Sea . The main difference between the two pipelines is that Nord Stream 1 has been operational since 2011, while Nord Stream 2 was completed in 2021 but is yet to enter service due to Germany withholding opening permission following Russia’s declaration of further parts of Ukraine territory belonging to breakaway republics . Another difference is that Nord Stream 2 is intended to double the amount of natural gas transported from Russia to Germany through the Baltic Sea . Additionally, Nord Stream 2 has been subject to more criticism due to concerns over European security and Russian hybrid warfare, while Nord Stream 1 has been operating for over a decade with less controversy .
But… there wasn’t already a pipeline to transport Natural Gas by land?
Yes, there are several pipelines that transport natural gas by land from Russia to Germany and other European countries. However, the Nord Stream pipelines are designed to transport natural gas directly from Russia to Germany via an underwater route through the Baltic Sea, bypassing other countries such as Ukraine and Poland that currently serve as transit countries for Russian gas exports to Europe . This allows Russia to avoid any potential disputes or conflicts with transit countries and to have more control over the transportation of its natural gas to Europe. Additionally, the Nord Stream pipelines are able to transport larger volumes of natural gas than existing land pipelines, which could help meet growing demand for natural gas in Europe in the coming years .
Yes, there was a project called the South Stream pipeline, which was designed to transport natural gas from Russia to Europe through Bulgaria, Serbia, Hungary, and Slovenia to Austria . However, the project was cancelled in 2014 due to objections from the European Union.
Instead, Russia’s Gazprom began construction of the Turkish Stream pipeline project, which follows a similar corridor to the South Stream pipeline . The Turkish Stream pipeline is intended to transport natural gas from Russia to Turkey and then on to southeastern Europe .
the two offshore pipelines of the Turkish Stream pipeline project are said to be 90% complete and the pipeline is intended to be operational by year-end . The pipeline runs through Turkey to southern Europe and is designed to deliver 31.5 billion cubic meters of gas from Russia’s southern region . The pipeline has the capacity to deliver 53% of Turkish gas demand and is expected to give Russia better access to the European market while increasing its capacity to bypass Ukraine completely .
On September 26, a series of deep-sea explosions rocked the Nord Stream and Nord Stream 2
On September 26, 2022, the Nord Stream 1 and Nord Stream 2 natural gas pipelines that transport gas from Russia to Germany through the Baltic Sea were attacked with explosives, causing gas leaks out of the pipelines . The attacks occurred in international waters but within the economic zones of Denmark and Sweden . Investigations are ongoing into the cause and the identities of the perpetrators remain unknown . The explosions triggered four gas leaks, which were measured at 2.3 and 2.1 on the Richter scale, and corresponded to an explosive load of “several hundred kilos” . The broader environmental impact of the unexplained gas leaks is not known, but climate scientists have described the leaks as an “environmental crime” due to the release of methane, which is 84 times more potent than carbon and doesn’t last as long in the atmosphere before it breaks down .
There are several theories about Who Really Blew Up the Nord Stream
There are several theories surrounding the Nord Stream pipeline explosions that occurred in September 2022. Some sources have blamed Moscow for the sabotage, while others suggest US involvement, although both suggestions have been denied . German law enforcement officials now suspect that multiple vessels were used, rather than the previously thought 50-foot sailboat, Andromeda, which may have been a decoy . US officials have recently seen new intelligence suggesting that a pro-Ukraine group was behind the sabotage, but there is no evidence of direct links between the saboteurs and Ukraine’s leadership . Investigations are ongoing, and the identities of the perpetrators remain unknown .
It is difficult to say who wins with the Nord Stream explosion, as the attack has caused damage to both the pipelines and the environment, and has also led to concerns about future energy security in Europe . The explosions have disrupted gas supplies to Europe, and many countries have been forced to look for alternative sources of gas, which could be more expensive and less reliable than Russian gas . Some experts suggest that the attack could have been carried out by a group seeking to disrupt the supply of gas to Europe, while others believe that it may have been an attempt to pressure Russia or to sabotage the Nord Stream pipeline project . However, investigations are still ongoing, and the identity and motives of the perpetrators remain unknown .
And about Natural Gas Prices…What occurred since Nord Stream Explosion? Prices dip -69.62%
After gas leaks were discovered in Russian subsea pipelines to Europe, gas prices reached the highest levels in mid-September, with the Nord Stream pipelines at the centre of an escalating energy war between Europe and Moscow that has damaged major western economies and sent gas prices soaring . However since that the prices have fallen from 6.83 to 2.08 (-69.62%).
Russia had also been reducing gas supplies to Europe all summer, and the complete shutdown of Nord Stream was hardly unexpected, which further raised concerns about the security of gas supplies to Europe . The EU has promised to respond robustly to any intentional disruption of its energy infrastructure, and Denmark’s defence minister has highlighted concerns about security in the region, with Russia said to have a significant military presence in the Baltic Sea region .
Meanwhile, German insurers Renewed cover for the damaged Nord Stream 1 gas pipeline
German insurers Allianz and Munich Re have indeed renewed their insurance coverage for the damaged Nord Stream 1 gas pipeline despite an alleged sabotage attack and Germany’s public stance on severing ties with Moscow . The renewal of insurance coverage is important for the future of the gas pipeline, which remains a major route for Russian gas to Europe . The policy covers damage to the pipeline and issues related to business interruption, and it could facilitate any repair work needed to resume gas supplies under the Baltic Sea . While some Nord Stream shareholders favour at least preserving the damaged pipeline in case relations with Moscow improve, Europe’s imports of Russian gas have fallen significantly since Russia’s invasion of Ukraine began in February 2022, and Russia remains the biggest supplier of natural gas to Germany .